2011 FINANCIAL REPORT

ARCHDIOCESE OF BOSTON

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Archdiocese of Boston Financial Report for the Year Ending June 30, 2011

TABLE OF CONTENTS

SECTION 1 – Letter from Cardinal Sean P. O’Malley, OFM Cap.

SECTION2 – Chancellor’s Annual Overview

SECTION 3 – Management’s Discussion and Analysis of Financial Position and Results of Activities

SECTION 4 – The Roman Catholic Archbishop of Boston, A Corporation Sole Financial Statements, Supplemental Schedules and Report of Independent Certified Public Accountants

SECTION 5 – Compensation and Vendor Expenditure Disclosure

SECTION 6 – Compensation Committee Report

SECTION 7 – Funding for Abuse Settlements and Related Costs

SECTION 8 – Audited Financial Statements of Corporation Sole’s Related Organizations

SECTION 9 – Financial Statements of Corporation Sole’s Parishes

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SECTION 1 – Letter from the Cardinal

My dear friends in Christ,

During the past year almost all organizations and businesses faced continued financial challenges as the effects of the recession proved more long-standing than had been expected. In light of these circumstances, I am very proud of the Archdiocese of Boston’s careful management of our resources and the contributions provided by donors. During the past fiscal year we were able to again achieve a balanced budget, much to the benefit of our parishes, schools and pastoral ministries.

Stewardship is at the heart of all that we do as a Church. We are called to exercise prudential judgment in carrying out the mission entrusted to us by Jesus Christ, to ensure a strong foundation and provide opportunities for growth. We are also called to be attentive to the present realities of our local Church and develop sustainable plans for the future. For that purpose, much time and effort is being given to developing a Pastoral Plan for the Archdiocese. We are greatly indebted to Msgr. William Fay and Mr. Charles Clough, co-chairs of the Archdiocesan Pastoral Planning Commission, and all the members of the Commission for their significant contributions to this important work.

We are blessed with many signs of hope in the Archdiocese at this time. Many parishioners dependably support their parishes with regular attendance and the gifts of time, talent and financial contributions. Our seminaries are approaching capacity as an increasing number of men answer the call to consider a vocation to the priesthood. We have expanded the Diaconate program and are now planning the ordination of Permanent Deacons every year. Campus ministry at area colleges and universities is thriving as large numbers of young people gather each week for prayer, the celebration of Mass and service projects.

There are also many areas of our life as a Church that call for attention and improvement. We must continue the essential work of evangelization, reaching out to the faithful who are not with us at Mass each Sunday. Well thought out communication initiatives will be central to this effort, and to all of our planning, and we must provide meaningful opportunities for participation as people respond. With the help of those who oversee the fiscal management of the Archdiocese, I am committed to achieving these goals and realizing the potential of our Catholic community, going forward in the name of the Lord.

With the assurance of my prayers for you and all whom you hold dear, I am,

Sincerely yours in Christ,

Archbishop of Boston

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SECTION 2 – Chancellors Annual Overview

James P. McDonough, Chancellor Secretary for Financial and Administrative Services

This Annual Financial Report presents financial results and activities for the Roman Catholic Archbishop of Boston, A Corporation Sole (RCAB) for the fiscal year ended June 30, 2011. Corporation Sole is comprised of Parishes, Self Insurance, Endowment, and Central Operations. Central Operations, in turn, is comprised primarily of Central Ministries, which consist of nearly 50 agencies and departments supporting the mission and administrative needs of Corporation Sole. Also included in Central Operations are Reconfiguration Activities, Special Collections, and Restricted Funds. The report seeks to provide, in as complete a manner as possible, the financial position and changes in net assets, maintaining our commitment to financial transparency since fiscal year 2005. This financial information and those of RCAB’s related organizations, [where available], are also located on the website, www.bostoncatholic.org.

CENTRAL MINISTRIES

During fiscal 2011, the goal of a balanced operating budget was once again achieved. The budget was approved in June 2010 as balanced with gross operating revenue and expense of $33.9 million. While this represented only a 1% reduction when compared to the fiscal 2010 budget plan, the fiscal 2011 plan included $1.2 million of revenue and expense for the [one-time] “Catholics Come Home” Program which, if excluded, would have represented a 5% reduction from the fiscal 2010 budget plan.

To address a potential shortfall of $3.5 million in the budget for fiscal 2011, the following measures were taken:

Staffing decisions resulting in over 20 positions affected by lay-offs, freezing of open positions and salary reductions; No cost of living adjustments to lay staff; Further reductions for travel and conference budgets; Various other expense reductions across the organization.

Since 2006, the Central Ministries operating budget has been stabilized but not without significant impact. Expenses are down 13% or $4 million, and the staff has been reduced by over 20% or 50 people. Despite these challenges, Central Ministries continues to build upon its culture of service.

PARISHES

Parishes and schools continue to persevere amidst an uncertain economic climate and through the leadership efforts of our pastors, parish financial operations remained stable over the course of fiscal 2011. Parish expenses in fiscal 2011 were significantly impacted by increases in maintenance and utilities costs due to the harsh winter weather. In fiscal 2012, we have launched a number of programs to address bulk purchasing, power consumption and other cost savings opportunities that will directly benefit our parishes.

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SCHOOLS

Our Catholic Schools Office provides support and service to 124 pre-kindergarten to grade 12 schools that educate approximately 42,000 students throughout the Archdiocese. This includes 89 parish and/or archdiocesan related entities, which have over 29,000 enrolled students. Academic excellence and strong faith formation continue to characterize all our Catholic schools as evidenced by grades, assessments, attendance, college matriculation, and evaluation reports. Our students outperform state and national averages on the Stanford10, PSAT, and SAT. They also attend college at far higher rates: 92 percent matriculate to college and 88 percent pursue four-year degrees.

As noted last year, our goal is to help schools establish tuition rates that cover at least 85% of the per-pupil cost, with fundraising and other sources providing the resources needed to achieve fiscal stability. Many of our schools have historically operated with tuitions rates $2,500-$3,000 less than the average cost per student. While scholarships and other sources of financial aid are helpful, they are not sufficient to cover the per-pupil cost differential. With the financial metrics and tools developed with the Elementary Schools Task Force, we now have a financial dashboard for our parish schools to help guide their short and long-term financial planning and monitoring. Financial workshops, training programs, and fiscal planning in the field with our boards and school leadership continue under the guidance of our Catholic Schools Office team.

Enrollment management has been a top priority for the Archdiocese of Boston and our partners for the past several years. In fiscal year 2011 we began to see positive results from our efforts. The enrollment decline that has dominated Catholic education nationally and locally for decades has slowed in the Archdiocese and in some cases been reversed:

Rate of decline dropped to 1.1 percent, the lowest rate in 10 years; Enrollment grew in over half the schools; Boston Catholic school enrollment grew by 1.0% – first time in 20 years (up to 7,700 students); Lowell Catholic school enrollment grew by 2.0% (up to 2,400 students).

Our schools are bolstered in all their work through systematic professional development, technical support and consultations from the Catholic Schools Office and partner education agencies. We are most fortunate to have the strong leadership and support of the Catholic Schools Foundation, the Campaign for Catholic Schools, the Lynch Foundation, the Mosakowski Family Foundation, and our five area Catholic college presidents.

To further advance the Archdiocese’s commitment to Catholic education, Cardinal Sean has now established an Education Advisory Council (July 2011) to provide strategic guidance and support to the work of the Catholic Schools Office. Chaired by Peter Lynch, the Education Council includes John Kaneb, Vice Chairman, Jack Regan, Jim Mooney, Sean McGrath, Msgr. Francis Kelley, VF, Peter Zotto, Dr. Patricia Weitzel-O’Neill, Tom Healey, and Fr. Kevin O’Leary, VF. We are grateful to the dedication of these business, civic, educational and religious leaders.

RISK MANAGEMENT

Risk management includes general insurance as well as self-insurance programs. Outreach efforts have been increased to offer the insurance and risk management program benefits, services and savings to more Catholic institutions and dioceses. These efforts will continue this year as we work to collaborate with other Catholic entities throughout Massachusetts and New England.

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During fiscal 2011 the risk management and insurance programs continued to expand the benefits and services provided to parishes, institutions and the Catholic community with projects such as:

The development and implementation of bullying prevention programs and enhanced safety and security programs for Catholic schools; Risk management, liability and litigation workshops for parish and institutional administrators; Food safety training, including safe food handling certifications; Publications such as hurricane preparedness guides, emergency response guides for schools, fraud prevention guides and a parish risk management/insurance manual.

We continue, in fiscal 2012, to look at opportunities to support our parishes and their planning; and with that in mind, the risk management and insurance program will direct resources to the development of programs, publications and workshops in business continuity planning, crisis management planning and response as well as the implementation and expansion of enterprise risk management applications for parishes and institutions.

IMPROVED FINANCIAL RELATIONSHIP MODEL

The Improved Financial Relationship Model (IFRM) of parish/Central Ministries financial interdependence began in fiscal 2010 with a Phase One volunteer group. This model ties the financial condition of Central Ministries with that of our parishes and simplifies the method of financial support between the parishes and Central Ministries, moving toward a “Fair Share” concept. This model has two components: a 10% tithe and an 8% Catholic Appeal assessment. As part of the model implementation, parishes conduct giving campaigns. This model strives to strengthen parishes by increasing their revenue.

In fiscal 2011 we completed our first year with the 33 Phase One parishes under IFRM. The results from these parishes were very positive with respect to both the implementation process and the financial results. In the first year, Phase One parishes had an increase of over $1.3 million in offertory collections, a 10% increase over their peers not in the IFRM. These same Phase One parishes received the benefit of an increase in rebates from their Appeal of over $336 thousand in 2011, versus $111 thousand in the prior year. Working within the framework of the IFRM, both increased offertory collections and Appeal rebates have given the IFRM parishes a significant boost to their operating income.

In fiscal 2012 we began a second Phase with an additional 45 parishes implementing the new financial model. Initial results from the increased offertory campaigns show the positive trends continuing. The Appeal rebates for Phase two parishes are up as well, at over $260 thousand, a 50% increase.

Our Phase One parishes continue to improve, with Appeal rebates again increasing thus far by 6% in the second year of implementation.

The feedback from parishes has been positive with regard to the simplicity of the implementation, the level of attention and service they received from the implementation team, and the ease of budgeting a constant monthly amount.

After an extensive consultation with the Presbyteral Council, the Cardinal accepted their recommendation to move forward with final implementation of the IFRM. Our remaining parishes will be implemented in two phases over the next two years.

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PASTORAL PLANNING

With the recent pastoral planning convocation of pastors, the Archdiocese has effectively kicked off this effort with the expectation of a new “Parish Service Team” model [approximately 125 teams] implemented throughout the Archdiocese headed by one Pastor and comprised of [as many as] three existing parishes. The intent is to capitalize on economies of scale and efficiencies within these parish groupings pertaining to councils, personnel and operating costs. Cardinal Sean, his leadership team, and the Pastoral Planning Commission remain committed to a new parish model that will support renewed efforts of evangelization.

FUNDRAISING

Boston Catholic Development Services, Inc. [BCDS] was launched during fiscal 2011 under the leadership of Kathleen Driscoll, Secretary for Institutional Advancement. This new entity and related development model was established to provide a more effective, coordinated and strategic development approach. It will serve as the development office for Central Ministries, Catholic schools, and Clergy Funds. BCDS will provide dedicated development professionals and strategies for the Catholic Appeal, the ministries and programs of the Archdiocese and the initiatives of our Catholic Schools and Clergy Funds. With the anticipated success of the model, it is hoped that other Catholic entities will join over the next several years. BCDS understands the challenges associated with this approach as well as the tremendous opportunity to promote a unified strategic vision for fundraising now and in the future.

INVESTMENT PERFORMANCE

Our average investment appreciation for the Common Investment Fund for the fiscal year ended June 30, 2011 was 19%, a continuation and improvement on last year’s growth of 12%. The Investment Committee of the Archdiocesan Finance Council actively manages our investment portfolio, seeking the best possible returns without incurring unnecessary risks.

At June 30, 2010, we ended the year with 54% equity, 45% fixed income and 1% cash. The Committee’s focus for 2011 was on limited fixed income growth, strong US large cap appreciation and emerging international markets. In line with that focus, as of June 30, 2011 the portfolio ended the year with 61% equity, 35% fixed income and 4% cash.

The sale of substantially all of Caritas Christi Health Care’s assets and the assumption of the majority of its liabilities by Steward Health Care System LLC took place in November, 2010. In July 2011, as a result of this sale, approximately 35% of the underlying CIP investments were fully redeemed to the Caritas Christi Retirement Plan. The Committee has positioned the portfolio for 2012 with an expectation of modest returns from investment grade fixed income, relatively stronger returns from US equities, with a tilt toward income oriented stocks, and managers of credit strategies as well as a longer horizon of emerging market international growth.

PENSION FUNDS

The Pension Plan Trustees voted to freeze the Plan effective December 31, 2011 to begin the process of reducing the Plan’s liability footprint over the course of the next 20+ years. Voluntary lump sum payments and immediate annuity options were offered to qualified current and former employees with vested benefits in March and September 2012. The Plan’s funded status improved to 86.4% as of June 30, 2011 due in large part to positive investment returns for Fiscal 2011. The March 2011 lump sums also assisted in improving the Plan’s funded status. Effective January 2012, a new 401(k) Plan, sponsored by the RCAB, will be in place for all locations within Corporation Sole and for approximately 25 additional related entities.

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CLERGY FUNDS

The clergy funds, including the Clergy Retirement/Disability Trust, the Clergy Medical/Hospitalization Trust and the Clergy Benefit Trust, hold the assets used to pay various clergy benefits. The unfunded liability of these funds is the responsibility of Corporation Sole. While the estimated unfunded liability remains considerable, it has continued to decline through active management of both the sources of funding as well as identification of additional opportunities to reduce costs.

The future viability of the Clergy Funds relies heavily on the Christmas, Easter, and June Clergy Benefit Trust collection, as well as the annual Priests’ Dinner. As the primary financial support for the Trusts, these collections help to ensure that our active priests are able to receive adequate health care and support.

ACCOUNTABILITY AND TRANSPARENCY

Included again this year with the release of this report is the Compensation and Vendor Disclosure which is modeled after the Internal Revenue Service Form 990. This report provides visibility into the compensation of the Corporation Sole's Officers, Council Members, Cabinet Members, and key employees whose compensation is greater than $150,000 as well as the five highest paid vendors.

In fiscal 2011 a Compensation Committee of the Finance Council was created to provide additional oversight in the area of compensation and benefits for the employees of the Archdiocese of Boston. This committee has the responsibility of reviewing the current compensation protocol and practices as well as the specific compensation for employees making greater than $150,000. A first report from the committee is included with the Compensation and Vendor Disclosure.

In fiscal 2011, a formal Code of Conduct and Conflict of Interest Policy (Code) which communicates key guidelines and assists in making ethical decisions that are in accordance with applicable legal requirements and other Archdiocesan policies was developed and distributed to all Council Members, Committees, Cabinet Members and employees of the Pastoral Center. Additionally, the Archdiocese continues to use EthicsPoint Inc. to host a telephone and internet site which will serve as a confidential hotline service for sources to anonymously report violations of the Code as well as other matters that may warrant the attention of the various Council and Cabinet Members. During fiscal 2010, a total of 13 reports were received which we reviewed, actions taken where appropriate/necessary, and responses provided to the anonymous reporters. All reports were reviewed by the Audit Committee of the Finance Council to ensure actions/activities were completed timely and appropriately.

Each of these steps demonstrates our continued commitment to providing maximum transparency with regards to the day-to-day operations of the Archdiocese.

CONCLUSION

As the new decade unfolds in the Archdiocese, it will be a time of continued challenges as well as great hope and opportunity. Pastoral Planning will be at the forefront but keeping the Central Ministries budget balanced will always be a top priority. As full implementation of the Improved Financial Relationship Model nears, it is expected that increased financial stability for parishes and Central Ministries will result. Given the uncertain economic times, financial discipline is needed more than ever. It is expected that Boston Catholic Development Services, now up and running, will play a major role in Central Ministries’ financial stability as well.

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Many thanks to all who assist Cardinal Sean and his leadership team including the laypersons, clergy and religious serving faithfully on the following committees and councils that assist the financial management team: Cardinal Sean’s Cabinet The Finance Council o Subcommittees including Audit, Real Estate, Investment, Legal, Parish Financial Services, Institutional Advancement and Compensation The Presbyteral Council The Improved Financial Relationship Committee The Priest’s Budget Advisory Committee The Clergy and Religious Stipend Committees

Central Ministries and the Pastoral Center remain committed to a culture of service, financial transparency and fiscally stable operations. Much work has been done and more remains. We will continue to serve and guide in these turbulent yet hopeful times knowing that “we can do all things through Christ, which strengthens us”.

James P. McDonough, Chancellor Secretary for Financial and Administrative Services

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SECTION 3 – Management’s Discussion and Analysis of Financial Position and Result of Activities

Discussion & Analysis of the Financial Statements

The following discussion and analysis should be read in conjunction with the 2011 financial statements, supplemental schedules, and report of independent certified public accountants contained in Item 4 of this financial report. Amounts are presented here in millions for ease of viewing the graphical information. Amounts in the financial statements are presented in thousands.

Introduction

The Roman Catholic Archbishop of Boston, A Corporation Sole (the “Corporation Sole”), is a legal entity created under Massachusetts civil law in 1897 to provide the Roman Catholic Archbishop of Boston with a means to operate within the public statutes of the Commonwealth of Massachusetts. The Corporation Sole, as an entity, is distinguishable from the Roman Catholic Archbishop of Boston whose powers and responsibilities are established by Canon Law. The financial statements of the Corporation Sole are grouped into four reporting units: the activities of all parishes located within the Archdiocese (“Parishes”), the central administrative activities and programs of the Archdiocese (“Central Operations”), central endowments (“Endowments”) and the Archdiocese self-insurance programs (“Self-Insurance”). The Parishes grouping includes the 291 parishes of the Archdiocese and the 70 schools and 42 cemeteries operated by these parishes. The Parishes grouping also includes the activities of the Revolving Loan Fund as well as the unfunded liabilities of the Clergy Retirement and Disability Trust, the Clergy Medical and Hospitalization Trust, the Clergy Benefit Trust, and the Non-Incardinated Trust. Included within the Central Operations grouping are the unrestricted and temporarily restricted assets and activities of the 2004 parish reconfiguration process. The Archbishop of Boston, by virtue of his office, serves as chairman of the board or president of numerous separately incorporated Catholic organizations that operate within the Archdiocese of Boston. While these organizations are considered to be related organizations of the Corporation Sole, they are not under the control of the Corporation Sole and, accordingly, their financial activities are not presented as part of the Corporation Sole’s financial statements. In addition, the unfunded liability of the lay pension plan, which operates under a separate trust, is not presented as part of the Corporation Sole because several other Catholic organizations participate in this plan. The listing of the related organizations that operate within the Archdiocese of Boston are included in Item 8 of this financial report. The financial statement highlights for 2011 listed below summarize the financial picture of the Corporation Sole at June 30, 2011.

2011 Financial Highlights

Net assets totaled $563.5 million, with unrestricted/undesignated net assets strengthening from a cumulative deficit of $11.5 million at June 30, 2010 to a breakeven position at June 30, 2011, as shown in the chart in question 2. In spite of a continued uncertain economic environment, operating income improved from a loss of $9.9 million in fiscal 2010 to income of $5.1 million in fiscal 2011. Nonoperating income, which includes realized and unrealized gains on investments, increased by $6.3M.

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Net assets increased $31.0 million, primarily as a result of strong investment performance, and stronger operating performance by parishes. Many of the 33 parishes that were in Phase 1 of the Improved Financial Relationship Model program at June 30, 2011 (a second phase was launched on July 1, 2011) experienced improved operating performance when compared to fiscal 2010. Average investment appreciation for the Common Investment Fund was 19%, a solid continuation and improvement on fiscal 2010 growth of 12%. This performance resulted in $15.4 million in realized and unrealized gains in fiscal 2011. Reserves for the handling of clergy sexual abuse claims at June 30, 2011 were $4.5 million, relatively consistent with the prior year. Central Operations revenues and other support were consistent with 2010 levels, while expenses were slightly lower. Clergy Trust Funds unfunded liability declined $6.1 million, strengthening the net assets position of parishes. The Archdiocese continues to have significant obligations related to unfunded clergy pension and post retirement obligation and debt to St. John’s Seminary.

These highlights are explained more fully in response to the "Key Questions" that follow.

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Key Questions

1) What was the financial position of Corporation Sole at June 30, 2011? Corporation Sole 2011 Statement of Financial Position (in millions)

Assets Liabilities Net Assets

2011 $ 767.1 2011 $ 203.6 2011 $ 563.5 2010 $ 737.2 Minus 2010 $ 204.7 Equals 2010 $ 532.5

The pie chart below shows the $563.5 million of Corporation Sole 2011 net assets separated into its four reporting units. Parishes at $494.7 million account for about 88% of the total, with Central Operations, Self- Insurance Fund and Endowment Fund accounting for the remaining 12%.

Corporation Sole - Total Net Assets June 30, 2011 (in millions)

$494.7

$46.6

$0.7 $1.9 $19.6

Parishes 88% Central Operations 8% Self Insurance 0% Endowments 4% Eliminations 0%

Additional information about the content of Corporation Sole's assets and liabilities will be provided in Questions #4, #5 and #6.

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2) How much of the 2011 Net Assets are subject to external restrictions or internal designations? Much of what is owned by Corporation Sole is subject to restrictions or designations. Only the unrestricted/undesignated resources are readily available to meet its financial needs. The following table shows the net assets that are subject to external restrictions or internal designations as of June 30, 2011. While it shows that there are currently no Unrestricted/ Undesignated net assets, this is an improvement from the deficit position of one year ago, largely due to strong investment performance.

Corporation Sole Net Assets as of June 30, 2011 (In millions)

Central Self Operation Parish Insuranc Endowment Elimination Total Parishes s Reconfiguration e s s Total 2010 Unrestricted Net Assets Unrestricted/Designated amounts for: (1) Net investment in land, buildings, equipment $ 419.4 $ 45.2 $ 3.3 $ - $ - $ - $ 467.9 $ 446.0 Parish reconfiguration funds - - 4.4 - - - 4.4 12.8 Cemetery future care 12.6 - - - - - 12.6 10.7 Designated for self insurance programs - - - 0.7 - 0.7 3.2 Unrestricted/Undesignated surplus (deficit) 30.3 (32.3) - - - 1.9 (0.1) (11.5) Total Unrestricted Net Assets 462.3 12.9 7.7 0.7 - 1.9 485.5 461.2

Restricted Net Assets Temporarily restricted 23.3 15.5 - - 4.1 - 42.9 37.0 Permanently restricted 9.1 10.5 - - 15.5 - 35.1 34.3 Total Restricted Net Assets 32.4 26.0 - - 19.6 - 78.0 71.3

TOTAL NET ASSETS $ 494.7 $ 38.9 $ 7.7 $ 0.7 $ 19.6 $ 1.9 $563.5 $ 532.5

(1) The recorded amount of land, buildings and equipment is less any related outsanding debt

3) How have the Net Assets changed during the year?

Overview of Changes in Net Assets

Overall, the net assets increased by $31.0 million during 2011. Parish net assets increased by $41.1 million. Improved operating performance at the parishes and capital campaigns contributed to the increase in net assets. Increases in collections and contributions, combining with expense reductions primarily related to school consolidations and closings which occurred in fiscal 2010, yielded an operating surplus of $12.1 million. Strong investment performance also contributed to the increase in net assets.

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The principal reasons for the $10.1 million decrease in Central Operations net assets were the transfer of assets from the parish reconfiguration fund to parishes, a contribution of assets to Cristo Rey High School, and an operating deficit, after increases of $1.5 million in the clergy misconduct reserve. The Self-Insurance Fund decreased as a result of negative operating results, with increases in claims and reserves resulting from three significant flood incidents. The Endowment Fund increases were the result of realized and unrealized gains on investments in the Common Investment Fund.

The Statement of Activities explains the changes in net assets. Changes in net assets result from operating and nonoperating activities of Corporation Sole. A more detailed explanation of operating and non-operating activities follows:

Corporation Sole 2011 Statement of Activities & Change in Net Assets (in millions)

Net Operating Net Nonoperating Net Asset Change

Revenues $ 343.2 Plus Nonoperating $ 27.3 Equals Less Less Expenses $ 338.2 Net asset transfer $ 1.3 Net $ 5.0 Net $ 26.0 Net $ 31.0

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Operating Activities-Revenues

The table below summarizes the comparable revenues, gains and other support for fiscal 2011 and 2010.

Corporation Sole Revenue, Gains & Other Support Categories (in millions)

$140

$120

$100

$80

$60

$40

$20

$- Parish Contributions, Rental and Total collections Tuition and Catholic change in Investment revenue from Other revenue Operating and other fees appeal interest net income services Revenues fundraising assets provided 2011 $146.6 $102.8 $12.5 $29.4 $5.3 $24.9 $21.7 $343.2 2010 $140.3 $106.1 $14.0 $23.8 $3.9 $22.3 $22.5 $332.9

Overall, revenues increased $10.3 million between the two years, with increases in parish collection, contributions, rental revenue, and investment income offsetting declines in tuition and fees and the Catholic Appeal. Tuition and Fees declined as a result of school consolidations and closures in fiscal 2010. The Catholic Appeal measures its performance on an appeal campaign year, which runs from March through February of the following year, so the above amounts differ from the published results of the Catholic Appeal. Investment income of $5.3 million, which increased by $1.4 million from the prior year, includes the yield from the Common Investment Fund, Fixed Income Fund and short-term investments. This amount does not include realized and unrealized gains.

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Parish collections and other fundraising increased $6.3 million or 4.5%. They included:

Corporation Sole Parish Collections / Other Fundraising (in millions) 2011 2010 Collections $ 115.7 $ 111.2 Collections - clergy benefits 9.3 8.4 Parish fundraiser events 15.5 14.8 Sacramental offerings 6.1 5.9 Total Parish Collections / Other Fundraising $ 146.6 $ 140.3

Collections for Clergy benefits are used to fund the costs of the Clergy Trust Funds.

Rental and revenue from services provided increased by $2.6 million or 11.7%. It included:

Corporation Sole Rental and Revenue from services provided (in millions) 2011 2010 Revenue from services provided $ 4.4 $ 4.4 Parish cemetery operations 4.2 4.1 Insurance fund revenues 1.8 1.5 Rental income 14.5 12.3

Total Rental & Revenue from services provided $ 24.9 $ 22.3

Other revenues decreased by $0.8 million from $22.5 million in fiscal 2010 to $21.7 million in fiscal 2011. Other revenues consist of all parish and school revenue that does not fall into other categories.

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Operating Activities-Expenses

Overall operating expenses declined $4.6 million or 1.3% for fiscal year 2011. The composition of Corporation Sole's program and other expenses, which are incurred primarily at the parish level includes: Corporation Sole Program and other expenses (in millions)

2011 2010 Parish life and leadership $ 170.3 $ 166.6 Catholic education 121.9 129.1 Faith formation and evangelization 7.6 7.1 Health and social services 2.5 2.7 Central and regional services 4.0 5.2 Media and public relations 0.5 1.9 Cemetery 4.3 4.6 Total program expenses 311.1 317.2 Management and general 18.4 18.8 Property and casualty insurance costs 5.1 3.9 Fundraising 2.0 1.8 Parish reconfiguration 1.6 1.1 Total other expenses 27.1 25.6 Total expenses $ 338.2 $ 342.8

The reduction in Catholic education expenses relate principally to eight school consolidations or closings which occurred in fiscal 2010. The increase in Parish life and leadership costs, which are primarily the operating costs of parishes, is driven largely by increases in maintenance and utilities costs at parishes that were impacted by harsh winter weather. Media and public relations costs declined as a result of transferring the Pilot from Corporation Sole to Boston Catholic Television Inc., a related unconsolidated entity.. Property and casualty insurance costs increased due to three significant flood incidents.

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Nonoperating Activities

Nonoperating income and expenses include capital campaigns, realized and unrealized gains on investments, any gains or losses on the sale of property, insurance recoveries, increments to the reserve for clergy misconduct and nonoperating pension-related adjustments. These revenues and/or costs can fluctuate significantly from one year to the next as is shown for 2011 and 2010 in the following table and the accompanying explanations: Corporation Sole Nonoperating Income (Loss) and Net Asset Transfers (in millions)

2011 2010 Nonoperating income (loss): Contributions $ 7.4 $ 9.1 Contribution to related organization (2.2) - Net realized and unrealized gain on investments 15.4 8.2 Gain on sale of land and buildings 9.3 7.1 Insurance and other recoveries 1.9 2.0 Settlements and related expenses (4.4) (2.4) Pension-related charges other than periodic pension costs (0.1) (3.0)

Total nonoperating income 27.3 21.0

Net asset transfers to related organizations (1.3) (2.5)

Total nonoperating and net asset transfers $ 26.0 $ 18.5

The contribution to a related organization is a transfer of assets in support of Cristo Rey High School. Corporation Sole’s participation in The Common Investment Fund drove the increase in realized and unrealized gains on investments. The increase in settlements and related expenses was due to a provision of $1.5 million which was added to the clergy misconduct reserve to provide for potential subsequent settlements and future costs of defense.

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4) What assets did we have and why did they change during the year? For the fiscal years ending June 30, 2011 and 2010, total assets within Corporation Sole were $767.1 million and $737.2 million respectively, an increase of $29.9 million or 4.0%.

Corporation Sole - Total Assets June 30, 2011 (in millions)

Cash and cash equivalents $95.2 12% 5% 21% 1% 0% Loans, contributions and other receivables $34.6 Other assets $9.1

Land and building held for sale $2.1

61% Land, buildings and equipment, net $466.2 Investments and interest in other entities $159.9

Asset Changes Fiscal 2011 versus Fiscal 2010

Cash and Cash Equivalents include the components shown in the table below. As of June 30, 2011, there were 291 parishes that have separate accounts for their regular operations.

Corporation Sole Cash & Cash Equivalents (in millions) $70

$60

$50

$40

$30

$20

$10

$- Parish Operations Revolving Loan Fund Central Operations Insurance Operations Parish Reconfiguration 2011 $64.0 $8.1 $15.7 $3.2 $4.2 2010 $62.7 $0.6 $19.4 $2.4 $4.9

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For the fiscal years ending June 30, 2011 and 2010, total investments within Corporation Sole were $145.3 million and $138.7 million respectively. As a component of total investments, Common Investment Fund rose from 62.3% at June 30, 2010 to 73.3% at June 30, 2011.

Corporation Sole Components of Investments (in millions) $120

$100

$80

$60

$40

$20

$- Common Investment Fund Fixed Income Fund Short-term Investments 2011 $106.5 $27.0 $11.8 2010 $86.4 $39.5 $12.8

Corporation Sole - Total Investments $145.3 13% (in millions) 1% 9% Parishes Central Operations Self-Insurance Endowments

77%

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Loans, contributions and other receivables, net, declined from $40.4 million to $34.5 million, largely due to payments on loan balances by the Campaign for Catholic Schools.

Corporation Sole Loans, Contributions & Other Receivables, net (in millions) 2011 2010 Loans receivable, net $ 24.8 $ 29.0 Contributions receivable, net 3.0 5.1 Accounts receivable, net 5.1 5.2 Interest and dividends receivable, net 1.6 1.1 Total loans, contributions and other receivables, net $ 34.5 $ 40.4

Land, buildings and equipment increased by $20.9 million, driven by $38.8 million of additions by parishes, offset by depreciation expense.

5) How did investments perform for the year, and how is the money invested? Investments increased from $138.7 million at June 30, 2010 to $145.3 million at June 30, 2011. While some money is invested in the Fixed Income fund and in short-term investments, a significant portion of our investments represent holdings in the Common Investment Fund, a related organization established to provide a common investment pool in which the Corporation Sole and other Catholic organizations may participate. The Common Investment Fund invests all of its funds in the RCAB Collective Investment Partnership, the underlying investments of which are primarily equity and fixed- income securities (U.S. Government and agency securities, asset-backed securities and corporate bonds) owned either directly or indirectly through mutual funds and private investment entities. Average investment appreciation for the Common Investment Fund for the fiscal year ended June 30, 2011 was 19%, with a portfolio consisting of 61% equity securities, 35% fixed income and 4% cash. The Investment Committee of the Archdiocesan Finance Council actively monitors our investment portfolio, seeking the best possible returns without incurring unnecessary risks.

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6) What liabilities did we have and why did they change during the year? Total liabilities were $203.6 million and $204.8 million at June 30, 2011 and 2010 respectively.

Corporation Sole - Total Liabilities (in millions) $120

$100

$80

$60

$40

$20

$- Accrued pension & Deferred revenue & Accounts payable & other retirement Notes payable Reserve for losses Other liabilities support accrued expenses costs 2011 $95.7 $43.9 $19.5 $23.8 $9.9 $10.8 2010 101.8 42.6 19.8 24.7 9.0 6.9

Liability Changes Fiscal 2011 versus Fiscal 2010

Total liabilities remained relatively consistent year over the year. The most significant change was in accrued pension and other retirement costs, which declined by $6.1 million. This liability represents the unfunded liability of the Clergy Trust Funds and the Non-Incardinated Trust. The primary reasons for this change are demographic assumption changes and claims cost reduction, offset by a reduction in the discount rate.

7.) Is the Revolving Loan Fund meeting its objectives? The Revolving Loan Fund is essentially an internal savings-and-loan program under which parishes and related organizations can deposit money, and those in need of funding can borrow from the fund. During fiscal 2011, Parishes and related organizations earned an average of 2.1% on their deposits, compared to 2.5% in fiscal 2010. The rate on borrowings from the fund ranges from 4.75% - 6%. Parishes, the principal participants in the fund, borrow primarily to finance Parish capital improvements. The Fund is intended to operate at break-even over the long-term. During fiscal 2011, the Revolving Loan Fund made significant progress towards its goal of eliminating its deficit, which declined from $5.6 million to $1.2 million. This was achieved through strong investment performance as well as a reduction in the interest paid on amounts on deposit to align more closely with market conditions.

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At June 30, 2011, the fund had 129 outstanding loans; 116 loans to Parishes and 13 loans to related organizations. Parish balances pertaining to participation in the Revolving Loan Fund are eliminated in the consolidated financial statements of Corporation Sole. A Summary Statement of Financial Position for the Revolving Loan Fund, prior to the elimination of parish balances is as follows:

Corporation Sole - Parishes - Revolving Loan Fund Summary Statement of Financial Position June 30, 2011 and 2010 (in millions) 2011 2010 Assets Cash and cash equivalents $ 8.1 $ 0.7 Loan and interest receivable, net 48.6 52.2 Investments 66.9 70.7 Total Assets 123.6 123.6

Deposits Parishes 111.8 116.0 Related organizations 13.0 13.2 Total Deposits 124.8 129.2

Net Assets Unrestricted/undesignated deficit (1.2) (5.6)

Total deposits & net assets $ 123.6 $ 123.6

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8) What were the operating activities of the Unrestricted Funds of Central Operations? Operating activities of Central Operations are primarily supported by the annual Catholic Appeal (32% of revenue) and contributions including certain collections, bequests and grants. Revenue for services provided includes fees for administration, technology and management services and program fees from areas such as Catholic Education, Parish Life and Leadership, Faith Formation and Evangelization and Health and Social Services (25% of revenue). Program expenses have remained relatively consistent the last two fiscal years, after adjusting for the Pilot costs, which moved from Central Operations to Boston Catholic Television Inc., a related, unconsolidated entity.

Corporation Sole - Central Operations Summary of Operating Activities - Unrestricted June 30, 2011 and 2010 (in millions) 2011 2010 Revenue, Gains & Other Support Catholic appeal $ 11.5 $ 8.9 Collections, contributions, bequests and grants 4.3 2.9 Investment, interest and rental income 1.5 1.1 Revenue from services provided 8.9 8.7 Other revenues and net assets released 9.4 11.7

Total revenues, gains & other support 35.6 33.3

Expenses: Parish life and leadership 2.5 2.3 Catholic education 1.8 1.6 Faith formation and evangelization 7.4 7.2 Health and social services 0.6 0.6 Central and regional services 4.1 4.8 Media and public relations 0.5 1.8 Total program expenses 16.9 18.3 Management and general 19.2 18.7 Fundraising 2.0 1.8 Parish reconfiguration 1.7 1.2 Total expenses 39.8 40.0 Operating loss $ (4.2) $ (6.7)

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Management and general expenses remained relatively flat between the two years. Interest on the note to St. John’s Seminary, which is tied to Common Investment Fund performance, drove the modest increase.

Corporation Sole - Central Operations Management and general expenses are comprised of: (in millions) 2011 2010

Professional, legal & audit $ 3.0 $ 2.9 Human resources 0.2 0.4 General services (archives and print & mail) 0.1 0.1 Chancellor's office, finance, MIS, Parish financial services, Insurance, Benefits 5.5 5.4 Building operations & maintenance 1.5 1.7 Facility & real estate management 0.6 0.7 General corporate 0.8 0.5 Parish support 2.7 3.3 Interest, depreciation & allowance 4.8 3.7

Total $ 19.2 $ 18.7

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9) What were the activities of the Parish Reconfiguration Fund during the year? During the year, $8.1 million of unrestricted closed Parish cash and buildings were transferred to Parishes and Central Operations. The assets transferred to Parishes included cash and investments of $2.4 million and net land, buildings and equipment of $0.9 million. The remaining cash of $4.8 million was used to establish an endowment fund to provide support services to Parishes. Operating activities included revenue of $0.3 million and $1.7 million of operating expenses principally for property management, maintenance, insurance, utilities and real estate taxes. Non-Operating activities included net gains from the sale of property of $0.1m and support to Parishes and related organizations of $0.3 million.

Parish balances pertaining to the Parish Reconfiguration Fund are eliminated in the consolidated financial statements of Corporation Sole. Below is a Summary Statement of Financial Position for the Parish Reconfiguration Fund at the respective June 30 year-ends.

Corporation Sole - Central Operations - Parish Reconfiguration Fund Summary of Statement of Financial Position June 30, 2011 and 2010 (in millions) 2011 2010 Assets: Cash and cash equivalents $ 3.5 $ 4.9 Deposits - Revolving loan 0.7 7.6 Land and building held for sale 0.6 0.6 Investments 0.2 0.3 Land, buidlings and equipment, net 2.7 3.9 Total assets 7.7 17.3

Liabilities: Accounts payable & accrued expenses 0.0 0.0 Total liabilities 0.0 0.0

Net Assets Unrestricted: Designated for Parish Reconfiguration 7.7 17.3 Total liabilities & net assets 7.7 17.3

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Financial Statements, Supplemental Schedules and Report of Independent Certified Public Accountants

The Roman Catholic Archbishop of Boston, A Corporation Sole

June 30, 2011 and 2010

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Contents

Page

Report of Independent Certified Public Accountants 3

Financial Statements

Statements of Financial Position 4

Statements of Activities 5

Statements of Cash Flows 7

Notes to Financial Statements 8

Supplemental Combining Information

Report of Independent Certified Public Accountants on Supplemental Information 40

Combining Statements of Financial Position 41

Combining Statements of Activities – Unrestricted 42

Combining Statements of Activities – Temporarily Restricted 43

Combining Statements of Activities – Permanently Restricted 44

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THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Statements of Financial Position (in thousands) June 30, 2011 and 2010

ASSETS 2011 2010 Cash and cash equivalents: Parish operations $ 64,041 $ 62,705 Revolving loan fund 8,062 637 Central operations 15,642 19,400 Insurance operations 3,242 2,439 Parish reconfiguration 4,205 4,899 Total cash and cash equivalents 95,192 90,080 Interest and dividends receivable, net 1,559 1,095 Prepaid expenses and other assets 9,113 8,104 Accounts receivable, net 5,092 5,211 Contributions receivable, net 3,078 5,085 Loans receivable, net (note C) 24,820 29,051 Land and buildings held for sale (note E) 2,141 1,345 Investments (note D) 145,346 138,739 Interest in net assets of a foundation 14,580 13,184 Land, buildings and equipment, net (note E) 466,215 445,323

Total assets $ 767,136 $ 737,217

LIABILITIES AND NET ASSETS

LIABILITIES: Accounts payable and accrued expenses $ 23,808 $ 24,695 Agency obligations 2,126 1,502 Reserves for losses (note J) 9,937 8,958 Due to related organizations 5,971 2,064 Deferred revenue and support 19,454 19,791 Accrued pension and other post-retirement costs (note M) 95,744 101,792 Other liabilities 2,682 3,327 Notes payable - related organization (note F) 43,517 42,014 Other notes payable (note F) 399 630 Total liabilities 203,638 204,773

NET ASSETS: Unrestricted 486,390 461,188 Temporarily restricted (note G) 42,152 36,985 Permanently restricted (note G) 34,956 34,271 Total net assets 563,498 532,444

Total liabilities and net assets $ 767,136 $ 737,217

The accompanying notes are an integral part of the financial statements 4

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THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Statements of Activities (in thousands) For the year ended June 30, 2011 (With summarized comparative information for the year ended June 30, 2010)

Temporarily Permanently 2011 2010 Unrestricted Restricted Restricted Total Total

REVENUES AND OTHER SUPPORT: Collections $ 114,044 $ 1,635 $ - $ 115,679 $ 111,138 Collections - clergy benefits - 9,344 - 9,344 8,401 Catholic Appeal 11,490 1,054 - 12,544 13,975 Contributions and bequests 21,773 6,243 - 28,016 22,650 Parish fundraiser events 15,477 - - 15,477 14,840 Tuition and fees 102,799 - - 102,799 106,117 Investment income 3,724 1,543 1 5,268 3,895 Rental income 14,456 - - 14,456 12,317 Cemetery operations 4,196 - - 4,196 4,064 Revenue from services provided (note N) 4,425 - - 4,425 4,380 Insurance revenues 1,818 - - 1,818 1,493 Sacramental offerings 6,118 - - 6,118 5,896 Other revenues 21,249 29 422 21,700 22,522 Change in interest in net assets of a foundation - 1,380 19 1,399 1,152 Net assets released from restrictions (note G) 25,755 (25,755) - - -

Total revenues and other support 347,324 (4,527) 442 343,239 332,840

EXPENSES: Program: Parish life and leadership 170,309 - - 170,309 166,636 Catholic education 121,857 - - 121,857 129,080 Faith formation and evangelization 7,604 - - 7,604 7,080 Health and social services 2,588 - - 2,588 2,744 Central and regional services 3,963 - - 3,963 5,220 Media and public relations 519 - - 519 1,863 Cemetery operations 4,273 - - 4,273 4,581 Total program expenses 311,113 - - 311,113 317,204 Management and general 18,467 - - 18,467 18,793 Property and casualty insurance costs 5,059 5,059 3,909 Fundraising (note N) 1,996 - - 1,996 1,800 Parish reconfiguration (note I) 1,553 - - 1,553 1,072 Total expenses 338,188 - - 338,188 342,778

Operating income (loss) 9,136 (4,527) 442 5,051 (9,938)

NONOPERATING INCOME: Contributions - 6,795 615 7,410 9,079 Contributions to related organizations (note N) (2,254) - - (2,254) - Net assets released from restrictions and reclassifications 875 (503) (372) - - Net realized and unrealized gain on investments 12,020 3,402 - 15,422 8,252 Gain on sale of land and buildings 9,284 - - 9,284 7,162 Insurance and other recoveries 1,926 - - 1,926 1,953 Settlements and related expenses (4,350) - - (4,350) (2,400) Pension-related charges other than periodic pension costs (112) - - (112) (3,031) Nonoperating income 17,389 9,694 243 27,326 21,015

CHANGE IN NET ASSETS 26,525 5,167 685 32,377 11,077

Net assets at beginning of year 461,188 36,985 34,271 532,444 523,867

Net asset transfers to related organizations (note N) (1,323) - - (1,323) (2,500)

Net assets at end of year $ 486,390 $ 42,152 $ 34,956 $ 563,498 $ 532,444 The accompanying notes are an integral part of the financial statements 5

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THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Statement of Activities (in thousands) For the year ended June 30, 2010

Temporarily Permanently 2010 Unrestricted Restricted Restricted Total

REVENUES AND OTHER SUPPORT: Collections $ 109,365 $ 1,773 $ - $ 111,138 Collections - clergy benefits - 8,401 - 8,401 Catholic Appeal 8,879 5,096 - 13,975 Contributions and bequests 16,233 6,417 - 22,650 Parish fundraiser events 14,840 - - 14,840 Tuition and fees 106,117 - - 106,117 Investment income 2,732 1,162 1 3,895 Rental income 12,317 - - 12,317 Cemetery operations 4,064 - - 4,064 Revenue from services provided (note N) 4,380 - - 4,380 Insurance revenues 1,493 - - 1,493 Sacramental offerings 5,896 - - 5,896 Other revenues 22,370 56 96 22,522 Change in interest in net assets of a foundation - 921 231 1,152 Net assets released from restrictions (note G) 25,776 (25,776) - -

Total revenues and other support 334,462 (1,950) 328 332,840

EXPENSES: Program: Parish life and leadership 166,636 - - 166,636 Catholic education 129,080 - - 129,080 Faith formation and evangelization 7,080 - - 7,080 Health and social services 2,744 - - 2,744 Central and regional services 5,220 - - 5,220 Media and public relations 1,863 - - 1,863 Cemetery operations 4,581 - - 4,581 Total program expenses 317,204 - - 317,204 Management and general 18,793 - - 18,793 Property and casualty insurance costs 3,909 3,909 Fundraising (note N) 1,800 - - 1,800 Parish reconfiguration (note I) 1,072 - - 1,072 Total expenses 342,778 - - 342,778

Operating income (loss) (8,316) (1,950) 328 (9,938)

NONOPERATING INCOME: Contributions - 5,959 3,120 9,079 Net realized and unrealized gain on investments 6,559 1,693 - 8,252 Gain on sale of land and buildings 7,162 - - 7,162 Insurance and other recoveries 1,953 - - 1,953 Settlements and related expenses (2,400) - - (2,400) Pension-related charges other than periodic pension costs (3,031) - - (3,031) Nonoperating income 10,243 7,652 3,120 21,015

CHANGE IN NET ASSETS 1,927 5,702 3,448 11,077

Net assets at beginning of year 461,761 31,283 30,823 523,867

Net asset transfers to related organizations (note N) (2,500) - - (2,500)

Net assets at end of year $ 461,188 $ 36,985 $ 34,271 $ 532,444 The accompanying notes are an integral part of the financial statements 6

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THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Statements of Cash Flow (in thousands) For the years ended June 30, 2011 and 2010

2011 2010

OPERATING ACTIVITIES: Change in net assets $ 32,377 $ 11,077 Adjustments to reconcile the change in net assets to net cash and cash equivalents provided by operating activities: Depreciation 16,856 15,906 Provision for uncollectible accounts, contributions and loans receivable 909 1,229 Interest accrued on note payable - related organization 1,503 603 Gain on sale of land and buildings (9,284) (7,162) Net realized and unrealized gain on investments (15,422) (8,252) Property related insurance recoveries (612) (347) Contributions restricted for long term purposes (7,410) (9,078) Change in interest in net assets of a foundation (1,396) (1,152) Changes in operating assets and liabilities: Interest and dividends receivable (1,204) 223 Prepaid expenses and other assets (1,009) (623) Accounts receivable 7 (33) Contributions receivable 2,026 2,223 Accounts payable and accrued expenses (4,531) 3,448 Agency obligations 624 373 Reserves for losses 979 (1,427) Due to related organizations 3,913 1,112 Deferred revenue and support (337) (25) Accrued pension and other postretirement costs (6,048) (2,169) Other liabilities (645) (160) Net cash and cash equivalents provided by operating activities 11,296 5,766

INVESTING ACTIVITIES: Proceeds from sale of land, buildings and equipment 9,670 7,824 Purchase of land, buildings and equipment (35,285) (32,177) Property related insurance recoveries 612 347 Proceeds from sale of investments and maturity of annuities 18,706 11,309 Purchase of investments (9,891) (48,126) Net repayments (advances) on loans 4,148 (648) Net cash and cash equivalents used in investing activities (12,040) (61,471)

FINANCING ACTIVITIES: Repayments of advances from related organization - (4,909) Proceeds from other notes payable - 375 Repayments of other notes payable (231) (11) Contributions restricted for long term purposes 7,410 9,078 Net cash and cash equivalents provided by financing activities 7,179 4,533

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 6,435 (51,172)

Cash and cash equivalents at beginning of year 90,080 143,752

Cash transfers to related organizations (note N) (1,323) (2,500)

Cash and cash equivalents at end of year $ 95,192 $ 90,080

Supplemental disclosure of cash flow information: Purchases of land, buildings and equipment in accounts payable $ 3,644 $ 4,574

The accompanying notes are an integral part of the financial statements 7

Page 37 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements June 30, 2011 and 2010 (Dollars in thousands)

NOTE A - NATURE OF ORGANIZATION

The Roman Catholic Archbishop of Boston, A Corporation Sole (the “Corporation Sole”) is a legal entity created under Massachusetts civil law in 1897 to provide the Roman Catholic Archbishop of Boston with a means to operate within, and be governed by, the public statutes of the Commonwealth of Massachusetts. The Corporation Sole, as an entity, is distinguishable from the Roman Catholic Archbishop of Boston whose powers and responsibilities are established by Canon Law.

The accompanying financial statements of the Corporation Sole include the activities of all parishes and their controlled schools and cemeteries located within the Archdiocese of Boston (the “Archdiocese”), central ministries (the Archdiocese administrative activities and programs), endowment funds and the self-insurance program (as further described in note B.)

The Archbishop of Boston, by virtue of his office, serves as chairman of the board or president of numerous separately incorporated Catholic organizations that operate within the Archdiocese of Boston. While these organizations are considered to be related organizations of the Corporation Sole, they are not under the control of the Corporation Sole and, accordingly, their financial activities are not presented as part of the accompanying financial statements.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements of the Corporation Sole have been prepared on the accrual basis of accounting and in accordance with the reporting principles of not-for-profit accounting.

The Corporation Sole reports three classes of net assets and the changes in those net assets in the statements of financial position and statements of activities, respectively. The three classes of net assets - unrestricted, temporarily restricted and permanently restricted - are based on the existence or absence of donor-imposed restrictions. The three classifications are defined as follows:

Unrestricted net assets - Assets and contributions that are not restricted by the donor or for which restrictions have expired.

Temporarily restricted net assets - Net assets subject to donor-imposed restrictions that permit the Corporation Sole to use or expend the donated assets as specified and that are satisfied by either the passage of time or by actions of the Corporation Sole.

Permanently restricted net assets - Net assets subject to donor-imposed stipulations that they be maintained permanently by the Corporation Sole or by a third party foundation or trustee for the benefit of the Corporation Sole. Generally, the donors of these assets permit the Corporation Sole to use, all or in part, the income earned on related investments for general or specific purposes. Unexpended appreciation on permanently restricted net assets is included in temporarily restricted net assets.

The Corporation Sole reports gifts of cash and other assets as restricted support if there are donor restrictions as to purpose or time. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions. 8

Page 38 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

The Corporation Sole reports gifts of land, buildings and equipment as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used are reported as restricted support. Absent explicit donor stipulations about how long those long-lived assets must be maintained, the Corporation Sole reports expirations of donor restrictions in the period the expenditure is made. Donor-restricted gifts intended for capital projects or for the endowment are reported as nonoperating contributions and are released from temporarily restricted net assets to be presented as unrestricted support when the related expenditures are incurred.

Cash Equivalents

Financial instruments with original maturities of three months or less at the purchase date are classified as cash equivalents. Included in cash equivalents are money market funds and certificates of deposit of $41,889 and $45,877 at June 30, 2011 and 2010, respectively.

The Corporation Sole deposits its cash in major financial institutions. These deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250 per institution. While at times funds deposited in banks are in excess of FDIC insured limits, the Corporation Sole reviews and monitors the strength of the financial institutions and as such has not experienced any losses as a result of the use of uninsured deposit accounts.

Accounts and Loans Receivable

Accounts receivable include amounts due for tuition and amounts due from related organizations for insurance and other central services and are reduced by an allowance for doubtful accounts. Loans receivable represent advances made to related organizations.

Loans receivable are stated at the amount of unpaid principal, reduced by an allowance for loan losses. Generally, loans are granted for specific periods of time and contain specific provisions regarding payment terms. Loans are generally collateralized by certain assets of the related organization being granted the loan. Interest income on performing loans is accrued at rates ranging from 4.75% to 6.00% on the respective unpaid principal balance.

Loans are classified as nonperforming, and considered impaired, when they are over ninety days past due. Generally, loans are restored to performing status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time and the ultimate collectability of the total contractual principal and interest is no longer in doubt.

Allowances for Accounts Receivable and Loan Losses

The allowances for accounts receivable and loan losses are maintained at a level believed by management to be representative of inherent losses estimated on the basis of factors such as the risk characteristics of the borrowers, underlying collateral and current economic conditions that may affect the borrower’s ability to pay. Loans and accounts receivable are written-off in whole or in part when, in management’s opinion, collectability is considered remote. Subsequent recoveries, if any, are recorded as an increase to the allowance.

While management uses available information to establish the allowance for accounts receivable and loan losses, future additions or reductions to the allowances may become necessary if circumstances differ from the assumptions used in making the evaluation.

9

Page 39 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Investments

Investments are carried at fair value. Changes in fair values are reflected in the statements of activities as gains or losses on investments.

Included in investments are holdings in the Common Investment Fund, Roman Catholic Archbishop of Boston (the “Common Investment Fund”) and the Fixed Income Investment Fund, Roman Catholic Archbishop of Boston (the “Fixed Income Fund”). Both are related organizations established to provide common investment pools in which the Corporation Sole and other Catholic organizations may participate. The participants own units based upon a per-unit value at the time of purchase. It is the policy of the Common Investment Fund to distribute a dividend to its members on a quarterly basis of 1% of the net assets of the Fund as of the previous quarter-end. The Fixed Income Fund does not have a policy of making automatic distributions. These dividend policies are subject to change at the discretion of the Archbishop of Boston. The Common Investment Fund and the Fixed Income Fund incur service fees from the Corporation Sole for administrative and clerical services performed on their behalf (note N).

The Common Investment Fund invests all of its funds in the Collective Investment Partnership, Roman Catholic Archbishop of Boston (the “Partnership”), the underlying investments of which include equity and fixed-income securities (U.S. Government and agency securities, asset-backed securities and corporate bonds) owned either directly or indirectly through mutual funds and private investment entities.

The fair value of the Fixed Income Fund and Partnership’s investments in domestic and foreign securities listed on securities exchanges is valued at the last reported sale price. For those securities whose prices are not available through independent pricing services, bid price quotations are obtained by the investment custodian from principal market makers in those securities or at fair value as determined in good faith by investment managers. Securities whose prices are not available through independent pricing services are recorded at fair value based on the net asset value per share on the valuation date as reported by the individual investment managers.

The Corporation Sole believes that these valuations are a reasonable estimate of fair value as of June 30, 2011 and 2010, but are subject to uncertainty and, therefore, may differ from the value that would have been used had a ready market for the investments existed. Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect amounts reported in the financial statements.

Interest in Net Assets of a Foundation

The Corporation Sole is a designated beneficiary in certain endowments and charitable gift annuities held by The Catholic Foundation of the Archdiocese of Boston, Inc. (“The Catholic Foundation”), a related organization (see note N). This beneficial interest in The Catholic Foundation is reflected on the statements of financial position as an interest in net assets of a foundation. The Corporation Sole receives quarterly distributions on these endowments to support central ministries and parish programs in addition to distributions from charitable gift annuities when the annuity obligation is satisfied. Changes to this beneficial interest for distributions, new contributions and investment activity are reflected on the statements of activities.

10

Page 40 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Land, Buildings and Equipment

Land and land improvements, buildings and building improvements, and furniture and equipment are carried at cost, or if donated, at fair market value at the time of donation. Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets, which range from five years for furniture and equipment to forty years for buildings. Expenditures for maintenance and repairs are charged to expense, whereas major betterments are capitalized.

Land and buildings held for sale are accounted for at the lower of cost or market. When buildings are classified as held for sale, depreciation is no longer recorded.

Reserves for Losses

Self Insurance and Reinsurance The Corporation Sole is partially self-insured for various risks incidental to the normal course of its activities. Such risks include fire damage (up to $500 annually), general liability claims (up to $250 per occurrence), theft losses and sudden accidental occurrences to boilers and related equipment. In addition, the Corporation Sole participates with other Catholic organizations in a separate workers’ compensation self-insurance group, Massachusetts Catholic Self-Insurance Group, Inc., a related organization.

The Corporation Sole also permits related organizations within the Archdiocese as well as other Catholic organizations to participate in its risk management program. A fee is assessed to these entities based on the type of risks shared among these organizations. The typical risk areas that the other organizations participate in include automobile liability, physical property damage and general liability. The Corporation Sole provides additional coverage for the peril of all fire, sudden and accidental occurrences, catastrophic umbrella liability and other miscellaneous coverage through the direct purchase of insurance. The Corporation Sole has retained carriers for its auto insurance and these carriers cover losses up to $1,000 with additional catastrophic limits.

Clergy Misconduct Claims The Corporation Sole estimates a reserve for settlement of reported misconduct claims and direct related litigation costs based on average historical settlement amounts. An additional reserve is accrued using the same historical settlement data for incurred but not reported claims based on an independent analysis performed by an actuary.

The reserves for losses are based on losses reported, historical experience and estimates of future trends in loss severity and frequency and other factors, which could vary as claims are ultimately settled. The ultimate settlement of losses and loss adjustment expenses may vary significantly from the estimated amounts included in the financial statements. The methods used to develop these reserves are subject to continuing review and refinement, and any necessary adjustments to these reserves are reflected in the statement of activities in the year identified.

Deferred Revenue and Support

Deferred revenue and support represents payments received and amounts billed for tuition, fees and support for program services to be provided in future periods.

11

Page 41 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Pension Benefits

Pension obligations and other post-retirement benefits are actuarially determined and are affected by several assumptions including the discount rate and assumed annual rates of return on plan assets. Changes in discount rate and differences from actual results will affect the amounts of pension and other post-retirement expense recognized in future periods. These assumptions may also have an effect on the amount and timing of future cash contributions. The Corporation Sole recognizes the over-funded or under-funded status of defined benefit post-retirement plans in its statement of financial position, measured as the difference between the fair value of plan assets and the benefit obligation. The change in the funded status of the plan is recognized in the year in which the change occurs through nonoperating income in the statement of activities. These provisions also require plan assets and obligations to be measured as of Corporation Sole’s statement of financial position date.

Conditional Asset Retirement Obligations

The liability for conditional asset retirement obligations represents an estimate for future obligations to perform certain retirement activities in connection with the ultimate disposition of tangible long-lived assets due to the nature of material used in their construction or operation. The timing of the performance of these retirement activities is within the control of the Corporation Sole and, due to the nature of these assets, will be performed over an extended period of time. The Corporation Sole is able to estimate its conditional asset retirement obligation for long-lived assets that are expected to undergo major renovations or have been identified for demolition through June 30, 2020. The Corporation Sole is not able to reasonably estimate its asset retirement obligation for periods after June 30, 2020 due to the uncertainty related to long-term renovation and demolition plans.

Included in other liabilities in the accompanying statements of financial position is $2,300 and $2,600 at June 30, 2011 and 2010, respectively, representing management’s estimate of its future obligation for such long-lived asset retirement activities.

Collections

Collections represent contributions received by Archdiocesan parishes for general and specified purposes. These funds are raised for parish operations and other purposes such as hunger, homelessness, and other human welfare programs and are reported as revenue in the statement of activities. Collections at Archdiocesan parishes for specified beneficiary organizations are not recorded as revenues, but are reflected as agency obligations until such time as the funds are remitted to the specified organization.

Catholic Appeal

The Catholic Appeal represents an annual solicitation by The Catholic Foundation through direct mailings and Archdiocesan parishes in support of the central ministry activities and programs of the Archdiocese.

The funds raised from the Catholic Appeal are reflected separately from the revenue from and change in interest in net assets of a foundation on the statements of activities and from the interest in net assets of a foundation on the statements of financial position.

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Page 42 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Contributions and Bequests

Unconditional promises to give are reported at fair value on the date the promise is verifiably committed. Unconditional promises to give that are expected to be collected within one year are recorded at net realizable value. Unconditional promises to give that are expected to be collected in future years are recorded at the present value of their estimated future cash flows. Unconditional promises to give are reported as contributions receivable. Conditional promises to give are not included as support until the conditions are substantially met.

Contributions receivable are reflected on the statements of financial position net of $121 and $140 of allowances for doubtful collections at June 30, 2011 and 2010, respectively.

Parish Fundraiser Events

Parish fundraising events are reflected on the statements of activities net of $6,931 and $6,408 of direct fundraising expenses for the years ended June 30, 2011 and 2010, respectively.

Rental Income

External parties and to a limited extent related organizations are charged rent for the use of property owned and operated by the Corporation Sole.

Cemetery Operations

Future care funds include only such funds for cemeteries operated by the parishes of Corporation Sole. They do not include the future care funds of cemeteries that are also within the Archdiocese of Boston but are no longer operated by a parish but rather owned and operated by The Catholic Cemetery Association of the Archdiocese of Boston, Inc., (“Cemetery Association”), a related organization.

Corporation Sole sets aside 30% of proceeds from its cemetery mausoleum sales and 10% of its cemetery plot sales into future care funds that are included in unrestricted net assets. Investment income earnings on these segregated future care assets are used for the long-term care and maintenance of Corporation Soles’ mausoleums and lots.

Revenue from Services Provided

The Corporation Sole provides various administrative, technology and clerical services to related Catholic organizations for which it charges fees. Such services include risk and benefits management, treasury and investment management, financial management, information technology and property management services. Fees and other revenue are also generated by pastoral and ministerial workshops and retreats and tribunal services.

Other Revenues

Other revenue primarily represents income from various goods sold and services provided by the parishes and parish schools.

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Page 43 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Beneficiary in Wills and Estates

The Corporation Sole is named as a beneficiary in numerous wills and estates. The Corporation Sole deems these to be intentions to give and not unconditional promises to give. When a probate court declares an individual will is valid and the fair value of the estate can be estimated, the Corporation Sole recognizes contribution revenue and a receivable for its interest in the estate.

Income Taxes

The Corporation Sole is included in the annual United States Conference of Catholic Bishops Internal Revenue Service Group Ruling and is therefore exempt from income tax under Section 501(c)(3) of the Internal Revenue Code. In fiscal year 2010, Corporation Sole adopted guidance which requires recognition of the benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Corporation Sole’s management has reviewed its tax positions as of June 30, 2011 and 2010 and determined that no provision for income taxes is required in these financial statements.

It is the Corporation Sole’s policy to record estimated interest and penalties (if any) as part of management and general expenses.

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 assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant items presented herein affected by the use of estimates are the allowances for uncollectible loans and accounts receivable, the fair value of investments, depreciable lives of buildings and equipment, reserves for losses, the accrued pension and other post-retirement obligations, the functional allocation of expenses and the reserve for conditional asset retirement obligations. Actual results could vary from those estimates.

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation.

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Page 44 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Recent Accounting Pronouncements

In April 2009, the Financial Accounting Standards Board (“FASB”) issued guidance on accounting for acquisitions by not-for-profit entities and for mergers of not-for-profit entities. Under this guidance, a not-for- profit entity must account for an acquisition using the acquisition method, with additional guidance unique to not- for-profit entities. The acquisition method requires the acquirer to measure and recognize the identifiable assets acquired, liabilities assumed, and any noncontrolling ownership interests in the acquiree at acquisition-date fair values, with some exceptions. Not-for-profit organizations that operate like a business by, for example, charging fees to cover costs, will recognize goodwill as an asset. A not-for-profit acquirer that does not operate like a business will recognize the amount that otherwise would be recognized as a goodwill asset as a separate charge in its statement of activities as of the acquisition date if the acquirer expects that the acquiree’s operations as part of the combined entity will be predominantly supported by contributions and returns on investments. This guidance is effective for acquisitions on or after the beginning of the first annual reporting period beginning on or after December 15, 2009. The Corporation Sole has adopted this guidance and will apply it to any mergers and acquisitions in the future.

In January 2010, the FASB issued guidance that clarifies existing disclosures and requires new disclosures about fair value measurements. The clarifications and the requirement to disclose the amounts and reasons for significant transfers between Level 1 and Level 2 and significant transfers into and out of Level 3 of the fair value hierarchy are effective for the fiscal year ending June 30, 2010. The new requirement that purchases, sales, issuances, and settlements be presented gross in the Level 3 reconciliation is effective for fiscal year 2011. The adoption of the amended guidance did not have a material impact on the fair value determination of the applicable investments, however, it did require additional disclosures. The disclosures required by the guidance are included in Note L – Fair Value Measurements.

In July 2010, the FASB issued guidance to enhance disclosures about the credit quality of a creditor’s financing receivables and the adequacy of its allowance for credit losses. The amended guidance is effective for period-end balances beginning with the first annual reporting period ending on or after December 15, 2010. The disclosure required by the guidance is included in Note C – Loans Receivable.

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Page 45 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE C - LOANS RECEIVABLE

Loans receivable consisted of the following at June 30 and are due from various Archdiocesan related organizations (primarily The Fund for Catholic Schools, Inc.):

2011 2010

Performing loans $ 26,720 $ 30,689 Nonperforming loans 2,641 2,855 29,361 33,544 Allowance for loan losses (4,541) (4,493)

Net loans receivable $ 24,820 $ 29,051

Accrued interest on loans receivable is included in interest and dividends receivable on the statements of financial position and is net of an allowance for doubtful collections of $3,075 and $2,324 at June 30, 2011 and 2010, respectively.

Changes in the allowance for loan losses were as follows for the years ended June 30:

2011 2010

Balance at beginning of year $ 4,493 $ 4,498 Additional provision (credit) for loan losses, net 48 (5)

Balance at end of year $ 4,541 $ 4,493

At June 30, 2011 and 2010, the following loan amounts were past due:

June 30, 1-60 days past due 60-90 days past due 90+ days past due Total past due 2011 181 - 2,641 $2,822 2010 30 - 2,855 $2,885

The Fund for Catholic Schools, Inc.

The Archbishop of Boston, working in coordination with a group of donors, established The Fund for Catholic Schools, Inc., to raise contributions for improvements to Catholic elementary schools in Brockton, Dorchester, Gloucester and South Boston. At June 30, 2011, the Corporation Sole has $21,185 of loans advanced to The Fund for Catholic Schools, Inc. for construction and reorganization costs. These loans have a fixed interest rate of 4.75%. The Fund for Catholic Schools, Inc. has pledges that are expected to be collected over the next 5 years that will be used to substantially paydown the loans to the Corporation Sole.

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Page 46 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE D - INVESTMENTS

Investments consisted of the following at June 30:

2011 2010

Common Investment Fund $ 106,536 $ 86,351 Fixed Income Fund 27,008 39,544 Short-term investments 11,719 12,762 Other investments 83 82

Total investments $ 145,346 $ 138,739

See note L for additional information regarding the determination of the fair value of investments.

NOTE E - LAND, BUILDINGS AND EQUIPMENT

Land, buildings and equipment consisted of the following at June 30:

2011 2010

Land and land improvements $ 63,087 $ 63,598 Buildings and improvements 1,177,850 1,142,383 Furniture and equipment 71,330 69,834 Construction in progress 907 5,001 1,313,174 1,280,816 Less accumulated depreciation (846,959) (835,494)

Land, buildings and equipment, net $ 466,215 $ 445,322

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Page 47 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE E - LAND, BUILDINGS AND EQUIPMENT - Continued

Land and buildings held for sale totaling $2,141 and $1,345 at June 30, 2011 and 2010, respectively, are carried at cost, net of accumulated depreciation, which is less than estimated net realizable value.

The Corporation Sole leases certain of its properties primarily to unrelated third parties. Properties under lease include buildings leased to several related Catholic high schools for $1 dollar per year for a term of 50 years. At June 30, 2011, scheduled receipts for the next five years and thereafter under non-cancelable long-term rental agreements are as follows:

Year ending June 30,

2012 $ 9,533 2013 7,619 2014 5,604 2015 4,385 2016 3,698 Thereafter 21,085

NOTE F - NOTES PAYABLE

Note Payable - Related Organization

In April 2005, the Corporation Sole entered into a $4,880 note payable to St. John’s Seminary (the “Seminary”), a related organization. The loan principal, together with interest accrued from the date of the note, was scheduled to be repaid on January 1, 2011. The Corporation Sole and the Seminary are in the process of finalizing an agreement to satisfy the retirement of this note. (see note O) For the period from July 1, 2005 through June 30, 2011, interest on the note is accrued at a rate equivalent to the annual average total return of the Common Investment Fund, which was 19.24% and 12.17% for the years ended June 30, 2011 and 2010, respectively. Accrued interest on this loan plus late fees amounted to $2,228 and $725 at June 30, 2011 and 2010, respectively, and is included in the balance of this loan as presented in the accompanying statements of financial position.

In October 2008, the Corporation Sole entered into a 10-year promissory note with the Seminary for $36,408 owed to the Seminary from the August 2007 joint sale of property. This note is non-interest bearing and subordinated to all other liabilities, obligations and indebtedness of the Corporation Sole. This promissory note becomes due and payable in one lump sum payment on August 23, 2017.

The estimated fair value of the $36,408 Seminary promissory note as of June 30, 2011 and 2010 is $23,918 and $22,301, respectively. This fair value is based on estimates using market interest rates available for similar debt with equivalent maturities and risk factors.

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Page 48 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE F - NOTES PAYABLE - Continued

Other Notes Payable

Other notes payable consist of secured amounts due to third party lenders with the following terms at June 30:

Interest Type - Security Rate Maturity Date 2011 2010

Mortgage note - Parish 5.75% September 19, 2023 $ 149 $ 235 Mortgage note - Parish 5.75% November 1, 2023 - 20 Mortgage note - School 0.00% May 31, 2013 250 375

Total other notes payable $ 399 $ 630

Scheduled principal payments on other notes payable as of June 30, 2011 are as follows:

Year Ending June 30

2012 $ 134 2013 134 2014 10 2015 10 2016 11 Thereafter 100

$ 399

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Page 49 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE G - TEMPORARILY RESTRICTED AND PERMANENTLY RESTRICTED NET ASSETS

Temporarily restricted net assets were available for the following purposes at June 30:

2011 2010

Buildings and equipment $ 9,756 $ 7,108 Special collections 245 294 Parish life and leadership 12,917 12,212 Catholic education 5,029 4,353 Faith formation and evangelization 3,920 1,763 Health and social services 589 621 Central administration 9,696 10,634

Total $ 42,152 $ 36,985

Net assets released from restrictions were expended for the following purposes for the years ended June 30:

2011 2010

Buildings and equipment $ 4,288 $ 227 Special collections 1,684 1,881 Parish life and leadership 12,014 15,266 Catholic education 1,039 621 Faith formation and evangelization 792 598 Health and social services 198 150 Media and public relations - 8 Central administration 5,740 7,025

Total $ 25,755 $ 25,776

Permanently restricted net assets, as described in note B, consist of the following at June 30. Income earned on these funds is available for the purposes described below:

2011 2010

Parish life and leadership $ 7,834 $ 8,079 Catholic education 3,540 3,044 Faith formation and evangelization 15,864 15,447 Health and social services 200 200 Central administration 7,518 7,501

Total $ 34,956 $ 34,271

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Page 50 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE H – ENDOWMENTS

The Corporation Sole’s endowment consists of 163 individual funds established for the support of various programs and central ministries. Net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions.

Interpretation of Relevant Law

On July 2, 2009, the Commonwealth of Massachusetts signed into law a Massachusetts version of the Uniform Prudent Management of Institutional Funds Act (“UPMIFA” or the “Act”). The Act applies to institutional funds existing on or established after June 30, 2009. The Act is codified as Chapter 180A of the Massachusetts General Laws. It replaces the prior statute, which had dealt with the same subject for approximately 35 years, known as the Massachusetts Uniform Management of Institutional Funds Act (UMIFA). Among other provisions, the new law provides greater flexibility to not-for-profit organizations to spend funds when the fair value is less than the original value of the donor’s gift commonly referred to as “underwater” funds.

The Corporation Sole has continued to follow its policy of preserving the corpus of the original gift of the donor- restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Corporation Sole 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, if any, 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, if any. This is regarded as the “historic dollar value” of the endowed fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets and is regarded as “net appreciation” is classified as temporarily restricted net assets until they are appropriated for expenditure in a manner consistent with the donor’s intentions and the Corporation Sole’s spending policy.

Funds with Deficiencies

From time-to-time, the fair value of assets associated with individual donor-restricted endowment funds may fall below their “historic dollar value”. Deficiencies of this nature are accounted for and reported by a charge to unrestricted net assets and corresponding increase to temporarily restricted net assets. The aggregate balance of the funds that fell below corpus amounted to $87 and $183 as of June 30, 2011 and 2010, respectively.

Endowment Investment Policy

The Corporation Sole has adopted an investment policy which attempts to provide a predictable stream of investment returns thereby making funds available annually to programs that are supported by its endowment, while at the same time seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the Corporation Sole must hold in perpetuity or for donor- specified periods. Under the Corporation Sole’s Investment Policy and spending policy, both of which are approved by the Roman Catholic Archbishop of Boston, the endowment assets are invested in a manner that is intended to produce an inflation-adjusted return in excess of the approved quarterly spending rate over a long period of time. Actual returns in any given year will vary and actual spending may exceed the quarterly dividend distributions.

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Page 51 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE H – ENDOWMENTS - Continued

Strategies Employed for Achieving Objectives

To satisfy its long-term rate-of-return objectives, the Corporation Sole 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). The majority of endowment investments are invested in the Common Investment Fund, which in-turn invests in the Collective Investment Partnership. The Investment Committee of the Archbishop’s Finance Council is responsible for selecting the investment managers of the Collective Investment Partnership. The Investment Committee’s investment rationale is to include an array of different strategies and investment managers for the Collective Investment Partnership’s portfolio to reduce overall volatility while providing investment returns above industry benchmarks.

Spending Policy

It is the policy of the Archbishop of Boston to appropriate for distribution on a quarterly basis 1% of the net assets of the endowment as of the previous quarter-end. In establishing this policy, the Corporation Sole considered the long-term expected return on its endowments. Accordingly, over the long term, the Corporation Sole expects the impact of the current spending policy to allow its endowments to grow at a nominal rate. This is consistent with the Corporation Sole’s objective to maintain the purchasing power of the endowment assets held in perpetuity as well as to provide additional real growth through new gifts and investment return. Actual distributions from the endowments may exceed the quarterly dividend.

Endowment net asset composition as of June 30, 2011 and 2010 is as follows:

Temporarily Permanently June 30, 2011 Unrestricted Restricted Restricted Total

Donor restricted endowments: Endowments $ (87) * $ 6,714 $ 23,000 $ 29,627 Beneficial interest in The Catholic Foundation - 2,475 9,007 11,482 Beneficial interest in perpetual trusts - - 2,949 2,949

$ (87) $ 9,189 $ 34,956 $ 44,058

Temporarily Permanently June 30, 2010 Unrestricted Restricted Restricted Total

Donor restricted endowments: Endowments $ (183) * $ 2,999 $ 22,751 $ 25,567 Beneficial interest in The Catholic Foundation - 1,677 8,988 10,665 Beneficial interest in perpetual trusts - - 2,532 2,532

$ (183) $ 4,676 $ 34,271 $ 38,764

* The deficit in unrestricted net assets represents the amounts by which the fair values of certain donor- restricted assets were below the amounts required to be retained permanently. 22

Page 52 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE H – ENDOWMENTS - Continued

Changes in endowment net assets for the years ended June 30, 2011 and 2010 are as follows:

Temporarily Permanently June 30, 2011 Unrestricted Restricted Restricted Total

Endowment net assets, beginning of year $ (183) $ 4,676 $ 34,271 $ 38,764

Contributions and bequests - - 615 615 Change in interest in net assets of a foundation - 799 19 818 Change in beneficial interest in perpetual trusts - - 422 422 Investment return: Investment income - 1,580 1 1,581 Net appreciation 96 2,862 - 2,958

Total investment return 96 4,442 1 4,539

Appropriation of endowment assets for operations (draw) - (1,100) - (1,100) Other changes: Net asset reclassification - 372 (372) -

Endowment net assets, end of year $ (87) $ 9,189 $ 34,956 $ 44,058

Temporarily Permanently June 30, 2010 Unrestricted Restricted Restricted Total

Endowment net assets, beginning of year $ (30) $ 2,788 $ 30,823 $ 33,581

Contributions and bequests - - 3,120 3,120 Change in interest in net assets of a foundation - 551 231 782 Change in beneficial interest in perpetual trusts - - 96 96 Investment return: Investment income - 857 1 858 Net appreciation (depreciation) (153) 1,663 - 1,510

Total investment return (153) 2,520 1 2,368

Appropriation of endowment assets for operations (draw) - (1,183) - (1,183)

Endowment net assets, end of year $ (183) $ 4,676 $ 34,271 $ 38,764

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Page 53 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE I - PARISH RECONFIGURATION

In May 2004, the Corporation Sole entered into a reconfiguration plan that included the suppression of certain parishes within the Archdiocese of Boston. This plan was in response to significant changes occurring within the Archdiocese of Boston, including changing demographics, a decline in the number of clergy, and the impact of deferred maintenance on parish properties. Sixty-four parishes have been closed and consolidated with adjoining parishes.

The Corporation Sole accounts for all financial activities of Archdiocesan parishes as a separate reporting unit in its financial statements. The Corporation Sole accounts for all closed reconfiguration parishes in Central Operations, another reporting unit of the Corporation Sole. At the time a parish was closed, the unrestricted net assets of the parish were transferred to Central Operations at their net book value.

The land and buildings associated with thirty-five suppressed parishes have been sold through June 30, 2011. Gains of $141 and $2,463 were recognized during the years ended June 30, 2011 and 2010, respectively, for reconfiguration sales. These gains are included in the accompanying statements of activities as part of the gain on sale of land and buildings.

The costs of maintaining the suppressed parish properties are included in the accompanying statements of activities as parish reconfiguration expenses.

NOTE J - RESERVES FOR LOSSES

The Corporation Sole has substantially exhausted its insurance coverage for clergy misconduct claims and is now self-insured for this risk of loss. The ultimate cost to defend or settle these claims is subject to uncertainty and the estimated liability is subject to change. The nature and the magnitude of the potential effects of these claims could have a material impact on Corporation Sole’s financial condition and cash flows.

At June 30, 2011 and 2010, the Corporation Sole’s reserve for estimated future settlements was $4,543 and $4,573, respectively, which is included in the reserves for losses in the accompanying statements of financial position. During the years ended June 30, 2011 and 2010, the Corporation Sole entered into settlement agreements with 23 and 30 individuals who had brought sexual misconduct claims at a cost of $1,695 and $2,085, respectively.

The Corporation Sole and related organizations are partially self-insured for various risks incidental to the normal course of its activities. Such risks include fire damage (up to $500 annually), general liability claims (up to $250 per occurrence), theft losses and sudden accidental occurrences to boilers and related equipment. At June 30, 2011 and 2010, the Corporation Sole’s reserve for these self-insurance losses was $5,394 and $4,384, respectively, which is included in the reserves for losses in the accompanying statements of financial position.

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Page 54 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE K – COMMITMENTS AND CONTINGENCIES

Construction

The Corporation Sole has commitments to fund construction and other contracted costs in the amount of $13,175 and $21,265 at June 30, 2011 and 2010, respectively.

Other Legal Proceedings

The Corporation Sole is involved in various legal proceedings arising out of and incidental to its activities other than claims of sexual misconduct discussed in Note J. In management’s opinion, the ultimate liability which may arise from these proceedings is not expected to have a material effect on the Corporation Sole’s net assets, changes in net assets and cash flows.

Guarantees

On October 22, 2010, Cardinal Spellman High School, Inc., a related organization, entered into a $3,200 loan agreement with a bank for leasehold improvements to a building owned by the Corporation Sole. Performance on this loan agreement is guaranteed by Corporation Sole. Corporation Sole’s guarantee is limited to the aforementioned land and building which it owns and leases to Cardinal Spellman High School, Inc. The estimated value is well in excess of the loan amount.

NOTE L – FAIR VALUE MEASUREMENTS

Corporation Sole measures the fair values of assets and liabilities at an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value hierarchy is used to prioritize the inputs to valuation techniques used to measure fair value. Corporation Sole classifies its assets and liabilities into Level 1 (securities valued using quoted prices from active markets for identical assets and liabilities), Level 2 (securities not traded on an active market for which observable market inputs are readily available), and Level 3 (securities valued based on significant unobservable inputs). A qualifying asset or liability’s level within the framework is based upon the lowest level of any input that is significant to the fair value measurement.

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Page 55 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE L – FAIR VALUE MEASUREMENTS - Continued

The following is a description of the valuation methodologies and inputs used for assets and liabilities measured at fair value, as well as the general classification pursuant to the valuation hierarchy.

Contributions Receivable

Contributions receivable are valued at fair value on a non-recurring basis. Any multi-year pledges received are recorded at the present value of future cash flows with a discount rate adjusted for any market conditions to arrive at fair value, and as such are considered Level 3 inputs.

Alternative Investments

Alternative investments consist of investments in the Common Investment Fund and the Fixed Income Fund. The fair value of these investments is determined using the net asset value (NAV) per share.. The investments, which are redeemable near year-end at NAV per share, are classified within Level 2 of the fair value hierarchy.

There are no unfunded commitments or redemption restrictions related to these investments at June 30, 2011 and 2010. Redemptions from the Fixed Income Fund are available on a daily basis and on a quarterly basis from the Common Investment Fund.

Short-Term and Other Investments

Short-term and other investments consist of certificates of deposit and mutual funds. Mutual funds are valued based on quoted prices in active markets and are classified within Level 1 of the fair value hierarchy. Certificates of deposit are valued based on quoted prices in active markets of similar instruments and are classified within Level 2 of the fair value hierarchy.

Beneficial Interest in Perpetual Trusts

The Corporation Sole is the beneficiary of two perpetual trusts maintained by third party trustees. These beneficial interests are included in prepaid expense and other assets in the statements of financial position at June 30, 2011 and 2010. These assets are classified as Level 3 because Corporation Sole’s share in the trusts does not have an active market. The Corporation Sole records the fair value of the trusts on a recurring basis based on the Corporation Sole’s share of the underlying investment portfolio that consists of actively traded equities, bonds and money market funds. The trusts are managed by financial institutions and investment managers who provide statements on a regular basis presenting the market value of the portfolio holdings.

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Page 56 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE L – FAIR VALUE MEASUREMENTS - Continued

Conditional Asset Retirement Obligations

Conditional asset retirement obligations are recorded at fair value on a non-recurring basis based on the present value of future obligations using a discount rate adjusted for any market conditions. Because fair value is based on significant unobservable inputs, it is considered to be valued with Level 3 inputs.

The valuation methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Corporate Sole believes its valuation methods are appropriate and consistent with those used by other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date and that difference may be material to the Corporate Sole’s financial statements.

Fair Value of Financial Assets

The Corporation Sole’s financial assets that are accounted for at fair value on a recurring basis as of June 30, 2011 and 2010, by level within the fair value hierarchy, are presented in the table below. Financial assets and liabilities measured at fair value on a non-recurring basis are excluded from the tables.

Balance as of Level 1 Level 2 Level 3 June 30, 2011

Investment in Common Investment Fund $ - $ 106,536 $ - $ 106,536 Investment in Fixed Income Fund - 27,008 - 27,008 Short-term and other investments 1,298 10,504 - 11,802 Beneficial interest in perpetual trusts - - 4,607 4,607

Total $ 1,298 $ 144,048 $ 4,607 $ 149,953

Balance as of Level 1 Level 2 Level 3 June 30, 2010

Investment in Common Investment Fund $ - $ 86,351 $ - $ 86,351 Investment in Fixed Income Fund - 39,544 - 39,544 Short-term and other investments 3,092 9,752 - 12,844 Beneficial interest in perpetual trusts - - 3,912 3,912

Total $ 3,092 $ 135,647 $ 3,912 $ 142,651

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Page 57 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE L – FAIR VALUE MEASUREMENTS – Continued

The following table presents a reconciliation of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended June 30, 2011 and 2010:

2011 2010

Balance at beginning of year $ 3,912 $ 3,646

Distributions (121) (98) Unrealized appreciation 816 364

Balance at end of year $ 4,607 $ 3,912

NOTE M - BENEFIT PLANS

Lay Employee Pension Plan

The Corporation Sole participates with other related Archdiocesan organizations in a noncontributory, defined benefit multi-employer pension plan covering substantially all lay employees known as the the Roman Catholic Archdiocese of Boston Pension Plan (the “Pension Plan”). The Corporation Sole’s employees represent approximately 60% of all lay employees covered under the Pension Plan. The Pension Plan is not subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). Pension expense allocated to the Corporation Sole is based on payroll cost and amounted to $7,395 and $7,216 for the years ended June 30, 2011 and 2010, respectively.

Accumulated plan benefits information for Corporation Sole, as provided by actuaries, has not been distinguished from the benefits of the other organizations participating in the Pension Plan and, accordingly, such information is not presented herein. At June 30, 2011, the audited financial statements of the Pension Plan reflected $284,476 in net assets available for benefits and $328,907 in accumulated plan benefits. At June 30, 2010, the audited financial statements of the Pension Plan reflected $264,847 in net assets available for benefits and $338,975 in accumulated plan benefits.

One July 29, 2010 the Pension Plan trustees voted to amend the Pension Plan to implement a freeze on accruing benefits effective December 31, 2011 and are planning to provide an employer match to employee contributions into a new defined contribution plan (see note O.)

Lay Employee Health and Dental Benefit Plan

The Corporation Sole participates with other related Archdiocesan organizations in a health and dental plan covering substantially all lay employees known as the Roman Catholic Archdiocese of Boston Health Benefit Plan (the “Health Plan”). The Corporation Sole’s employees represent approximately 71% of all lay employees covered under the Health Plan. The Health Plan agreement provides that the participating employers make monthly contributions to the Health Plan of a specified amount for each class of employee. The Corporation Sole’s contributions to the Health Plan amounted to $19,469 and $16,860 for the years ended June 30, 2011 and 2010, respectively.

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Page 58 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE M - BENEFIT PLANS – Continued

Lay Employee Health and Dental Benefit Plan - continued

At June 30, 2011, the audited financial statements of the Health Plan reflected $2,143 in health and dental benefit obligations and $8,846 in net assets available for benefits. At June 30, 2010, the audited financial statements of the Health Plan reflected approximately $1,962 in health and dental benefit obligations and $10,296 in net assets available for benefits. During the fiscal year ended June 30, 2010, Caritas Christi, a related organization, withdrew from participating in the Health Plan. The Health Plan trustees voted to transfer $9,250 to Caritas Christi representing an estimate of their allocation of net assets available for benefits. This transfer occurred during fiscal 2010.

Clergy Health and Retirement Plans

Archdiocese of Boston Clergy Funds

The Corporation Sole sponsors a single-employer, noncontributory, defined benefit retirement and disability plan covering priests incardinated in the Roman Catholic Archdiocese of Boston. Benefits for priests who are in good standing within the norms of canon law (“Eligible Priests”) are provided through the Archdiocese of Boston Clergy Funds (the “Clergy Funds”), which include those funds that provide for the health, welfare, disability, and retirement of Eligible Priests. The Clergy Funds include the Clergy Benefit Funding Trust (the “Funding Trust”), the Clergy Retirement Trust (the “Retirement Trust”), and the Clergy Medical/Hospitalization Trust (the “Medical Trust”). The Clergy Funds are not subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Benefits for priests who are on administrative leave and who are in canonical process as a result of accusations of misconduct with a minor are paid directly by Corporation Sole.

The Clergy Funds also offer other post-retirement benefits, including health, dental and subsistence benefits which are expected to be paid to or on behalf of currently retired clergy and active clergy after retirement. This obligation is unfunded.

The Clergy Funds primary source of funding benefits is from contributions, principally from special collections from parishes in the Archdiocese of Boston, and health assessments to parishes and other Catholic organizations within the Archdiocese of Boston. The collections are initially held in the Funding Trust. Funds are transferred to the Medical Trust and the Retirement Trust at the discretion of the Trustees.

Effective July 1, 2010, the Clergy Funds Board of Trustees adopted new trust agreements for the Funding Trust, Medical Trust and Retirement Trust. These new trust agreements continue the provision of the existing plans and trust with added clarification of benefits and provisions, including the clarification that the use of funds is only to support benefits to Eligible Priests.

Reserve for Health Insurance Claims

Reserve for health insurance claims consist of medical and dental claims payable for benefits provided to Eligible Priests. Obligations for health claims incurred by Eligible Priests but not reported are estimated by management based on historical experience.

At June 30, 2011 and 2010, the audited financial statements of the Clergy Funds reflected $574 and $644, respectively, of health and dental benefit obligations.

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Page 59 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE M - BENEFIT PLANS– Continued

Non-Incardinated Priests

The Corporation Sole sponsors a noncontributory pension benefit plan covering ordained priests who were not incardinated in the Roman Catholic Archdiocese of Boston, but who have been duly assigned by the Roman Catholic Archbishop of Boston for service within the Archdiocese for a minimum period of at least ten years and who are in good standing within the norms of canon law. Benefits are provided through The Benefit Trust for Non-Incardinated Priests Duly Assigned for Service in the Archdiocese of Boston (the “Non-Incardinated Trust”). The Non-Incardinated Trust is not subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Effective July 1, 2010, the accrual of benefits under the Non-Incardinated Trust were frozen and the net obligation is included in Corporation Sole’s statements of financial position.

A transfer of $1,075 was made to the Non-Incardinated Trust from the Funding Trust during the year ended June 30, 2010, to assist in funding the Trust’s obligations. No future transfers from the Funding Trust to the Non-Incardinated Trust are expected.

The assets and obligations of Corporation Sole’s clergy retirement and other post-retirement benefits were as follows as of June 30:

Benefit Obligations

For the year ended June 30, 2011 Pension Benefits Other Benefits Non- Clergy Incardinated Admin Clergy Admin Funds Trust Leave Funds Leave Total

Change in benefit obligation: Benefit obligation at beginning of year $ 81,715 $ 952 $ 6,408 $ 44,288 $ 2,847 $ 136,210 Service cost 1,016 33 - 910 - 1,959 Interest cost 4,261 50 324 2,560 159 7,354 Actuarial (gain) loss (4,376) 7 472 (2,040) 273 (5,664) Benefits and other expenses paid (6,907) (82) (1,242) (1,355) (458) (10,044)

Benefit obligation at end of year $ 75,709 $ 960 $ 5,962 $ 44,363 $ 2,821 $ 129,815

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Page 60 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE M - BENEFIT PLANS– Continued

For the year ended June 30, 2010 Pension Benefits Other Benefits Non- Clergy Incardinated Admin Clergy Admin Funds Trust Leave Funds Leave Total

Change in benefit obligation: Benefit obligation at beginning of year $ 83,045 $ 933 $ 6,528 $ 41,828 $ 2,473 $ 134,807 Service cost 893 29 - 770 - 1,692 Interest cost 4,942 56 364 2,679 145 8,186 Actuarial loss 676 3 854 278 694 2,505 Benefits and other expenses paid (7,841) (69) (1,338) (1,267) (465) (10,980)

Benefit obligation at end of year $ 81,715 $ 952 $ 6,408 $ 44,288 $ 2,847 $ 136,210

The weighted average assumptions used to determine all benefit obligations were as follows:

Pension Benefits Other Benefits 2011 2010 2011 2010

Discount rate 5.30% 5.40% 5.65% 5.80% Rate of compensation increase N/A N/A N/A N/A Health care cost trend rate assumed for next year N/A N/A 8.50% 8.00% Rate to which the cost trend rate is assumed to decline (ultimate trend rate) N/A N/A 5.00% 5.00% Year that the rate reaches the ultimate trend rate N/A N/A 2020 2016

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Page 61 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE M - BENEFIT PLANS – Continued

Plan Assets

For the year ended June 30, 2011 Pension Benefits Other Benefits Non- Clergy Incardinated Admin Clergy Admin Funds Trust Leave Funds Leave Total

Change in Plan assets: Fair value of Plan assets at beginning of year $ 34,111 $ 1,081 $ - $ - $ - $ 35,192 Actual return on Plan assets, net of administration expense (1,515) (30) - - - (1,545) Employer contributions 7,990 - 1,242 1,355 458 11,045 Benefits and other expenses paid (6,900) (82) (1,242) (1,355) (458) (10,037) Other contributions -

Fair value of Plan assets at end of year $ 33,686 $ 969 $ - $ - $ - $ 34,655

For the year ended June 30, 2010 Pension Benefits Other Benefits Non- Clergy Incardinated Admin Clergy Admin Funds Trust Leave Funds Leave Total

Change in Plan assets: Fair value of Plan assets at beginning of year $ 29,913 $ 95 $ - $ - $ - $ 30,008 Actual return on Plan assets, net of administration expense (1,503) (20) - - - (1,523) Employer contributions 6,944 - 1,338 1,267 464 10,013 Benefits and other expenses paid (7,584) (69) (1,338) (1,267) (464) (10,722) Other contributions 6,341 1,075 - - - 7,416

Fair value of Plan assets at end of year $ 34,111 $ 1,081 $ - $ - $ - $ 35,192

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Page 62 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE M - BENEFIT PLANS – Continued

The asset allocation for the Clergy Funds at the end of 2010 and 2011, and the target allocation for 2011, by asset category, are as follows:

Actual Target % of Plan Assets at Year End 2011 2011 2010

Equity securities 0.0% 0.0% 0.9% Debt securities 0.0% 0.0% 0.9% Other investments 0.0% 0.0% 0.7% Real estate* 31.3% 31.3% 31.6% Cash and cash equivalents 68.7% 68.7% 65.9%

Total 100% 100% 100%

* Real estate is valued at book value and is leased to a related party.

The investment policy and strategy is to provide for growth of capital with a moderate level of volatility by investing assets based on the target allocations stated above. The Clergy Funds will reallocate its investments periodically to meet the above target allocations. The Clergy Funds also reviews its investment policy periodically to determine if the policy or allocations should be changed.

The Clergy Funds short term investments of $8,252 are accounted for as a level 2 in the fair value hierarchy at June 30, 2011.

Other assets and liabilities included in plan assets that are not measured at fair value include cash and cash equivalents, real estate and deferred lease income.

The target asset allocation for the Non-Incardinated Trust for fiscal year 2011 was 100% in cash and cash equivalents and the actual allocation at June 30, 2011 was 100% in cash and cash equivalents. Cash equivalents of $978 as of June 30, 2011 are valued based on quoted prices in active markets.

Reconciliation of Funded Status

As of June 30, 2011 Pension Benefits Other Benefits Clergy Non- Admin Clergy Admin Funds Incardinated Leave Funds Leave Total

Fair value of plan assets $ 33,686 $ 969 $ - $ - $ - $ 34,655 Benefit obligation (75,709) (959) (5,962) (44,937) (2,822) (130,389)

Funded status - (obligation) asset $ (42,023) $ 10 $ (5,962) $ (44,937) $ (2,822) $ (95,734)

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Page 63 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE M - BENEFIT PLANS – Continued

As of June 30, 2010 Pension Benefits Other Benefits Clergy Non- Admin Clergy Admin Funds Incardinated Leave Funds Leave Total

Fair value of plan assets $ 34,111 $ 1,081 $ - $ - $ - $ 35,192 Benefit obligation (81,715) (952) (6,408) (44,932) (2,847) (136,854)

Funded status - (obligation) asset $ (47,604) $ 129 $ (6,408) $ (44,932) $ (2,847) $ (101,662)

Components of Net Periodic Pension Cost

For the year ended June 30, 2011 Pension Benefits Other Benefits Non- Clergy Incardinated Admin Clergy Admin Funds Trust Leave Funds Leave Total

Service cost for benefits earned during the period $ 1,016 $ 33 $ - $ 910 $ - $ 1,959 Interest cost on projected benefit obligation 4,261 50 324 2,560 159 7,354 Expected return on Plan assets (1,969) (67) - - - (2,036) Net amortization and deferral (1,802) - 17 (649) 31 (2,403)

Net periodic pension cost $ 1,506 $ 16 $ 341 $ 2,821 $ 190 $ 4,874

For the year ended June 30, 2010 Pension Benefits Other Benefits Non- Clergy Incardinated Admin Clergy Admin Funds Trust Leave Funds Leave Total

Service cost for benefits earned during the period $ 893 $ 29 $ - $ 770 $ - $ 1,692 Interest cost on projected benefit obligation 4,942 56 364 2,679 145 8,186 Expected return on Plan assets (2,127) (5) - - - (2,132) Net amortization and deferral (2,167) - - (702) - (2,869)

Net periodic pension cost $ 1,541 $ 80 $ 364 $ 2,747 $ 145 $ 4,877

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Page 64 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE M - BENEFIT PLANS – Continued

Accumulated Amounts Charged (Credited) to Unrestricted Net Assets

As of June 30, 2011 Pension Benefits Other Benefits Non- Clergy Incardinated Admin Clergy Admin Funds Trust Leave Funds Leave Total

Net actuarial loss (gain) $ (16,167) $ 131 $ 1,310 $ (9,694) $ 936 $ (23,484) Prior service cost (credit) (15,133) - - (4,073) - (19,206)

Total $ (31,300) $ 131 $ 1,310 $ (13,767) $ 936 $ (42,690)

As of June 30, 2010 Pension Benefits Other Benefits Non- Clergy Incardinated Admin Clergy Admin Funds Trust Leave Funds Leave Total

Net actuarial loss (gain) $ (15,830) $ 28 $ 854 $ (7,873) $ 694 $ (22,127) Prior service cost (credit) (16,380) - - (4,502) - (20,882)

Total $ (32,210) $ 28 $ 854 $ (12,375) $ 694 $ (43,009)

During the year ending June 30, 2012, $1,247 of the accumulated amounts credited to non-operating income will be amortized into operating expenses.

The weighted average assumptions used to determine all benefit plan costs were as follows:

Pension Benefits Other Benefits 2011 2010 2011 2010

Discount rate 5.30% 5.40% 5.65% 5.80% Rate of compensation increase - - - - Expected return on plan assets 6.50% 6.50% N/A N/A

Health care cost trend rate assumed for next year N/A N/A 8.5% 8.0% Rate to which the cost trend rate is assumed to decline (ultimate trend rate) N/A N/A 5.0% 5.0% Year that the rate reaches the ultimate trend rate N/A N/A 2020 2016

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Page 65 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE M - BENEFIT PLANS – Continued

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one percentage point change in assumed health care cost trend rates would have the following effects on the Clergy Funds:

Other Benefits Other Benefits One Percentage One Percentage Point Increase Point Decrease 2011 2010 2011 2010

Effect on service and interest cost $ 610 $ 578 $ (489) $ (465) Effect on benefit obligation 6,007 5,882 (4,964) (4,866)

To determine the expected long-term rate of return, the Clergy Funds considered the historical returns of the major market indicators relating to the target asset allocation, as well as the current economic and financial market conditions.

Expected Benefit Payments

Clergy Clergy Non- Admin Admin Funds Funds Incardinated Leave Leave Years ending Pension Other Pension Pension Other June 30 Benefits Benefits Benefits Benefits Benefits Total

2012 $ 6,691 $ 1,786 $ 109 $ 753 $ 221 $ 9,560 2013 6,608 2,010 103 696 228 9,645 2014 6,564 2,210 97 659 232 9,762 2015 6,475 2,403 90 623 234 9,825 2016 6,350 2,584 87 587 231 9,839 2017 - 2021 29,611 15,254 346 2,384 1,075 48,670

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Page 66 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE N - RELATED PARTY TRANSACTIONS

Revenue from Service Provided

The Corporation Sole provides administrative, accounting, technology and clerical services to related Catholic organizations. Reimbursement of the costs of providing these services was $4,425 and $3,937 during the years ended June 30, 2011 and 2010, respectively. The revenue from these services is included in revenue from services provided in the accompanying statements of activities.

Catholic Foundation

The Corporation Sole utilizes The Catholic Foundation to provide all centralized fundraising services including the annual Catholic Appeal, Planned Giving and other fundraising activities. Amounts paid to The Catholic Foundation for these services amounted to $1,996 and $1,800 for the years ended June 30, 2011 and 2010, respectively.

Net Assets Transfer From (To) Related Organizations

On November 16, 2010, the Corporation Sole transferred the governance and related operating assets and liabilities (excluding land and buildings held by Corporation Sole) of the elementary school at St. Rita’s Parish in Lowell to a newly formed related organization, Ste. Jeanne d’Arc School of Lowell, Massachusetts. This $1,323 transfer is reflected as a net asset transfer in the statement of activities for the year ended June 30, 2011.

During the year ended June 30, 2010, $2,500 was transferred to Pope John Paul II Catholic Academy, a related organization, to assist them with their final payments to construction contractors. This transfer is reflected as a net asset transfer to a related organization in the statement of activities for the year ended June 30, 2010.

Cristo Rey Boston High School, Inc.

During fiscal 2011, Cristo Rey Boston High School, an unconsolidated related entity, transferred its operations from North Cambridge Catholic, which was owned by Corporation Sole, to St. Williams High School in Dorchester, owned by Blessed Mother Teresa of Calcutta parish. The excess of the selling price of the North Cambridge Catholic building over the purchase price of the St. Williams building was $2,254. The receipt of these funds by Cristo Rey is presented as a contribution to related organization within nonoperating income in the statement of activities.

Catholic Schools Foundation

The Catholic Schools Foundation, Inc., a related organization, provides support to Catholic schools located in the Archdiocese of Boston. During the years ended June 30, 2011 and 2010, this foundation awarded $2,262 and $2,946 in inner city scholarships to elementary schools that are operated by the Corporation Sole’s parishes.

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Page 67 of 94 THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Notes to Financial Statements - Continued June 30, 2011 and 2010 (Dollars in thousands)

NOTE O - SUBSEQUENT EVENTS

On July 29, 2010, the trustees of the Pension Plan voted to amend the Plan to implement a freeze on accruing benefits effective December 31, 2011. Employees with five or more years of service will remain fully vested. Employees with at least one year of service as of December 31, 2011, will be allowed to continue to add years of service towards vesting after the freeze date. A new Archdiocese of Boston 401(k) Retirement Savings Plan will be launched effective January 1, 2012.

St. John’s Seminary holds a notes receivable due from Corporation Sole with a principal balance of $4,880 and accumulated interest and late fees of $2,228 for a total of $7,108. The Corporation Sole and the Seminary are in the process of finalizing an agreement to address the retirement of this note.

In connection with the preparation of these financial statements, the Corporation Sole has evaluated events and transactions through January 13, 2012, which is the date these financial statements were available for issuance.

38

Page 68 of 94

SUPPLEMENTAL COMBINING INFORMATION

Page 69 of 94

Page 70 of 94

-

637 630

2,439 4,899 1,095 8,104 5,211 5,085 1,345 1,502 8,958 2,064 3,327 62,705 19,400 90,080 29,051 13,184 24,695 19,791 42,014 36,985 34,271

138,739 445,323 737,217 101,792 204,773 461,188 532,444 737,217

2010 Total

$ $ $ $ -

399

9,113 2,141 1,559 2,126 5,971 8,062 3,242 4,205 5,092 3,078 9,937 2,682 64,041 15,642 95,192 14,580 19,454 43,517 42,152 24,820 23,808 95,744 34,956

145,346 466,215 767,136 767,136 203,638 486,390 563,498

2011 Total

$ $ $ $ ------

(22) (106) (277)

1,902 1,902 (6,473) (6,473) (6,601) (6,221) (2,005) (8,503) (6,601) Eliminations

$ $ $ $ ------

29 151 151 197 356 356

4,136 19,596 19,944 15,423 19,588 19,944

Endowments

$ $ $ $ ------5 4 17 92

321 706 706

3,242 3,242 1,125 2,120 6,513 5,394 5,807 6,513

Self-Insurance

$ $ $ $ - - - -

22

119 381 216 188

4,205 6,473 6,849 1,694 1,201 5,034 1,260 4,543 8,785

(1,277)

15,491 26,169 12,379 12,716 47,326 43,517 62,266 21,416 14,714 10,460 46,590

108,856 108,856 Central Operations

$ $ $ $ - - - - -

940 866 399

8,062 1,226 1,139 4,812 1,384 1,864 2,494 2,005 9,073

64,041 72,103 24,816 18,730 13,021 19,238 86,959 23,302

111,251 418,889 638,424 143,712 462,337 494,712 638,424 Parishes

$ $ $ $ Total cash and cash equivalents Total assets Total liabilities Total net assets Total liabilities and net assets Parish operations Revolving loan fund Central operations Insurance operations Parish reconfiguration Deposits with the Corporation Sole-Revolving Loan Fund Accounts payable and accrued expenses Agency obligations Reserves for losses Due to related organizations Deferred revenue and support Accrued pension and other post retirement costs Other liabilities Note payable related- organization Other notes payable Unrestricted Temporarily restricted Permanently restricted

THE THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE thousands) (in Position of Financial Statements Combining 2011 30, June 2010) 30, of as June information summarized (With ASSETS Cash and cash equivalents: Interest and dividends receivable Prepaid expenses and other assets Accounts receivable, net Contributions receivable, net Loans receivable, net Land and buildings held for sale Investments Interest in net ofassets foundationa buildingsLand, and equipment, net LIABILITIES AND NET ASSETS LIABILITIES: ASSETS: NET

41

Page 71 of 94

THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Combining Statements of Activities - Unrestricted (in thousands) For the year ended June 30, 2011 (With summarized information for the year ended June 30, 2010)

Central 2011 2010 Parishes Operations Self-Insurance Endowments Eliminations Total Total

REVENUES AND OTHER SUPPORT: Collections $ 112,967 $ 1,346 $ - $ - $ (269) $ 114,044 $ 109,365 Catholic Appeal - 11,490 - - - 11,490 8,879 Contributions and bequests 18,791 2,982 - - - 21,773 16,233 Parish fundraiser events 15,477 - - - - 15,477 14,840 Tuition and fees 102,482 351 - - (34) 102,799 106,117 Investment income 3,243 1,218 65 - (802) 3,724 2,732 Rental income 14,171 285 - - - 14,456 12,317 Cemetery operations 4,196 - - - - 4,196 4,064 Revenue from services provided - 8,915 - - (4,490) 4,425 4,380 Insurance revenues - - 5,889 - (4,071) 1,818 1,493 Sacramental offerings 6,118 - - - - 6,118 5,896 Other revenues 23,582 341 - - (2,674) 21,249 22,370 Change in interest in net assets of a foundation ------Net assets released from restrictions 16,362 8,682 - 711 - 25,755 25,776 Total revenues and other support 317,389 35,610 5,954 711 (12,340) 347,324 334,462

EXPENSES: Program: Parish life and leadership 175,253 2,521 - 84 (7,549) 170,309 166,636 Catholic education 120,323 1,781 - 34 (281) 121,857 129,080 Faith formation and evangelization - 7,374 - 561 (331) 7,604 7,080 Health and social services 1,932 625 - 31 - 2,588 2,744 Central and regional services - 4,077 - - (114) 3,963 5,220 Media and public relations - 519 - - - 519 1,863 Cemetery operations 4,272 - 1 - 4,273 4,581 Total program expenses 301,780 16,897 - 711 (8,275) 311,113 317,204 Management and general 1,488 19,171 1,615 - (3,807) 18,467 18,793 Property and casualty insurance costs - - 6,594 (1,535) 5,059 3,909 Fundraising - 1,996 - - - 1,996 1,800 Parish reconfiguration - 1,721 - - (168) 1,553 1,072 Total expenses 303,268 39,785 8,209 711 (13,785) 338,188 342,778

Operating income (loss) 14,121 (4,175) (2,255) - 1,445 9,136 (8,316)

NONOPERATING INCOME (LOSS): Contributions to related organizations (note N) - (2,254) - - - (2,254) - Net assets released from restrictions 875 - - - - 875 - Net realized and unrealized gain on investments 10,158 1,490 372 - - 12,020 6,559 Gain on sale of land and buildings 5,785 3,499 - - 9,284 7,162 Insurance and other recoveries 1,509 - 1,952 - (1,535) 1,926 1,953 Settlements and related expenses - (1,836) (2,600) - 86 (4,350) (2,400) Pension-related credits (charges) other than periodic pension costs 586 (698) - - - (112) (3,031) Nonoperating income (loss) 18,913 201 (276) - (1,449) 17,389 10,243

CHANGE IN NET ASSETS 33,034 (3,974) (2,531) - (4) 26,525 1,927

Net assets at beginning of year 426,273 29,743 3,237 29 1,906 461,188 461,761

Net asset transfers from (to) related organizations 3,030 (4,353) - - - (1,323) (2,500)

Net assets at end of year $ 462,337 $ 21,416 $ 706 $ 29 $ 1,902 $ 486,390 $ 461,188

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Page 72 of 94

THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Combining Statements of Activities - Temporarily Restricted (in thousands) For the year ended June 30, 2011 (With summarized information for the year ended June 30, 2010)

Central 2011 2010 Parishes Operations Self-Insurance Endowments Eliminations Total Total

REVENUES AND OTHER SUPPORT: Collections $ - 1,635 - - - $ 1,635 $ 1,773 Collections - clergy benefits 9,344 - - - - 9,344 8,401 Catholic Appeal - 1,054 - - - 1,054 5,096 Contributions and bequests 4,133 2,110 - - - 6,243 6,417 Parish fundraiser events ------Tuition and fees ------Investment income 690 109 - 744 - 1,543 1,162 Rental income ------Cemetery operations ------Revenue from services provided ------Insurance revenues ------Sacramental offerings ------Other revenues - 29 - - - 29 56 Change in interest in net assets of a foundation 165 1,215 - - - 1,380 921 Net assets released from restrictions (16,362) (8,682) - (711) - (25,755) (25,776) Total revenues and other support (2,030) (2,530) - 33 - (4,527) (1,950)

Operating income (loss) (2,030) (2,530) - 33 - (4,527) (1,950)

NONOPERATING INCOME (LOSS): Contributions 6,516 279 - - - 6,795 5,959 Net assets released from restrictions and reclassifications (503) - - - - (503) - Net realized and unrealized gain on investments 861 - - 2,541 - 3,402 1,693 Gain on sale of land and buildings ------Insurance and other recoveries ------Settlements and related expenses ------Pension-related credits (charges) other than periodic pension costs ------Nonoperating income (loss) 6,874 279 - 2,541 - 9,694 7,652

CHANGE IN NET ASSETS 4,844 (2,251) - 2,574 - 5,167 5,702

Net assets at beginning of year 18,458 16,965 - 1,562 - 36,985 31,283

Net asset transfers from related organizations ------

Net assets at end of year $ 23,302 $ 14,714 $ - $ 4,136 $ - $ 42,152 $ 36,985

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Page 73 of 94

THE ROMAN CATHOLIC ARCHBISHOP OF BOSTON, A CORPORATION SOLE Combining Statements of Activities - Permanently Restricted (in thousands) For the year ended June 30, 2011 (With summarized information for the year ended June 30, 2010)

Central 2011 2010 Parishes Operations Self-Insurance Endowments Eliminations Total Total

REVENUES AND OTHER SUPPORT: Collections $ - $ - $ - $ - $ - $ - $ - Collections - clergy benefits ------Catholic Appeal ------Contributions and bequests ------Parish fundraiser events ------Tuition and fees ------Investment income 1 - - - - 1 1 Rental income ------Cemetery operations ------Revenue from services provided ------Insurance revenues ------Sacramental offerings ------Other revenues 5 417 - - - 422 96 Change in interest in net assets of a foundation 9 10 - - - 19 231 Net assets released from restrictions ------Total revenues and other support 15 427 - - - 442 328

Operating income (loss) 15 427 - - - 442 328

NONOPERATING INCOME: Contributions 615 - - - - 615 3,120 Net assets released from restrictions and reclassifications (372) - - - - (372) - Net realized and unrealized gain on investments ------Gain on sale of land and buildings ------Insurance and other recoveries ------Settlements and related expenses ------Pension-related credits (charges) other than periodic pension costs ------Nonoperating income 243 - - - - 243 3,120

CHANGE IN NET ASSETS 258 427 - - - 685 3,448

Net assets at beginning of year 8,815 10,033 - 15,423 - 34,271 30,823

Net asset transfers from related organizations ------

Net assets at end of year $ 9,073 $ 10,460 $ - $ 15,423 $ - $ 34,956 $ 34,271

44

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SECTION 5 – Compensation and Vendor Expenditure Disclosure

Corporation Sole’s Compensation and Vendor Disclosure December 31, 2010

Included again this year with the release of this report is the Compensation and Vendor Disclosure which is modeled after the Internal Revenue Service Form 990. This report provides visibility into the compensation of the Corporation Sole's Officers, Council Members, Cabinet Members, and key employees whose compensation is greater than $150,000 as well as the five highest paid vendors. Compensation data is provided for the calendar year which ends within the fiscal period reported in the consolidated financial statements. Therefore, for the fiscal year ending June 30, 2011, the compensation information presented is for calendar year 2010.

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Corporation Sole’s Compensation and Vendor Disclosure December 31, 2010 Reportable Amount of Average Reportable Compensation Other Hours Position Compensation Name and Title from Compensation per from Related Corporation Not Included Week Organizations Sole [1] on W-2/1099 Officers: His Eminence Seán P. Cardinal 40+ Archbishop of Boston, President $41,500 [2] $0 $14,400 O’Malley, O.F.M. Cap. & Treasurer Very Reverend Richard M. Erikson, 40+ Clerk, Vicar General & Moderator $40,723 $0 $14,400 Ph.D. VG of the Curia Mr. James P. McDonough 40+ Assistant Clerk, Chancellor $239,480 $0 $37,006 F. Beirne Lovely, Jr., Esq. 40+ Assistant Clerk, General Counsel $298,052 $0 $28,117 Finance Council (Other than Officers): Mr. John H. McCarthy, CPA. -[3] Vice Chair $0 $0 $0 Mr. John M. Connors, Jr. -[3] Member $0 $0 $0 Mr. Peter S. Lynch -[3] Member $0 $0 $0 Mr. Robert M. Mahoney -[3] Member $0 $0 $0 Rev. Brian Manning [4] 40+ Member $41,100 $0 $14,400 Mr. George E. Massaro -[3] Member $0 $0 $0 Mr. Sean P. McGrath -[3] Member $0 $0 $0 Robert J. Morrissey, Esq. -[3] Member $0 $0 $0 Mr. Kevin C. Phelan [5] -[3] Member $0 $0 $0 Ms. Mary L. Ryan -[3] Member $0 $0 $0 Paul W. Sandman, Esq. -[3] Member $0 $0 $0 Ms. Laura J. Sen -[3] Member $0 $0 $0 Mr. John Kaneb -[3] Life Member $0 $0 $0 Mr. William F. McCall, Jr. -[3] Life Member $0 $0 $0 Mr. James Mooney, Jr. -[3] Life Member $0 $0 $0 Mr. John A. McNeice -[3] Life Member $0 $0 $0 Mr. Giles Mosher, Jr. -[3] Life Member $0 $0 $0 Presbyteral Council (Other than Officers): [6] Rev. Oscar Pratt 40+ Member $38,900 $0 $14,400 Rev. Vincent E. Daily 40+ Member $39,500 $0 $14,400 Rev. John J. Unni 40+ Member $39,300 $0 $14,400 Rev. Msgr. William Fay 40+ Member $41,100 $0 $14,400 Rev. Timothy Harrison 40+ Member $39,400 $0 $14,400 Rev. Thomas Rafferty 40+ Member $38,550 $0 $14,400 Rev. Darin Colarusso 40+ Member $38,550 $0 $14,400 Rev. Gerald Osterman 40+ Member $41,800 $0 $14,400 Rev. Shawn Allen 40+ Member $38,600 $0 $14,400 Rev. Brian Mahoney 40+ Member $39,000 $9,300 $14,400 Rev. Marc Bishop 40+ Member $38,550 $0 $14,400 Rev. Robert Conole 40+ Member $39,400 $0 $14,400 Rev. George Evans 40+ Member $40,800 $0 $14,400 Rev. Gerard Petringa 40+ Member $39,700 $0 $14,400 Rev. Paul Sullivan 40+ Member $42,200 $0 $14,400 Rev. Brian Manning 40+ Member $41,100 $0 $14,400

1 Reportable Compensation from Corporation Sole for any Clergy does not include any nominal monies received from related organizations for ad hoc services. 2 From Cardinal O’Malley’s stipend, $34,300 is paid to the Capuchin Priests and Brothers; $7,200 is paid to the Cathedral of the Holy Cross, Boston for housing. 3 Less than 5 hours per week to Corporation Sole, does not include services to related entities, if any. 4 Compensation and health benefits paid to Fr. Manning are for his position as pastor of St. Mary Parish, Franklin. 5 Mr. Phelan is Co-Chairman of Colliers International. The RCAB does business with Colliers as a real estate entity. Through the course of real estate transactions, Corp Sole has paid this firm $96,000 for real estate commissions during the 2010 calendar year: 4/13/10 Quincy – St. Joseph - $66,000, 5/3/10 Dedham – St. Mary - $30,000 Mr. Phelan consistently abstains from voting on any real estate transactions involving this firm. 6 Compensation and health benefits paid are for services provided to Corporation Sole or other related entities and not for their services on the Council.

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Reportable Amount of Average Reportable Compensation Other Hours Position Compensation Name and Title from Compensation per from Related Corporation Not Included Week Organizations Sole [1] on W-2/1099 Rev. Peter Casey 40+ Member $41,700 $0 $14,400 Rev. Paul Soper 40+ Member $39,500 $0 $14,400 Very Rev. Joseph Raeke 40+ Member $40,500 $0 $14,400 Very Rev. Charles J. Higgins 40+ Member $41,000 $0 $14,400 Rev. George Emerson 40+ Member $15,464 $0 $6,950 Rev. Edwin Condon -[3] Member $0 [7] $0 $6,950 Most Rev. Emilio Allué 40+ Member $33,225 $0 $10,296 Most Rev. John Boles 40+ Member $21,483 $0 $6,950 Most Rev. John Dooher 40+ Member $41,600 $0 $14,400 Most Rev. Walter Edyvean 40+ Member $42,800 $0 $14,400 Most Rev. Robert Hennessey 40+ Member $40,700 $0 $14,400 Most Rev. Francis Irwin 40+ Member $21,483 $0 $6,950 Most Rev. Arthur Kennedy -[3] Member $0 $42,250 $14,400 Most Rev. Peter Uglietto 40+ Member $40,800 $0 $14,400 Rev. Msgr. Dennis Sheehan 40+ Member $42,200 $0 $14,400 Very Rev. Walter Carreiro 40+ Member $39,000 $0 $14,400 Very Rev. Arthur Coyle 40+ Member $41,500 $0 $14,400 Very Rev. Thomas Foley 40+ Member $39,150 $0 $14,400 Very Rev. Mark O’Connell 40+ Member $40,200 $7,000 $14,400 Very Rev. Bryan Parrish 40+ Member $37,400 $0 $14,400 Rev. David Couturier, OFM Cap. 40+ Member $40,772 [8] $0 $6,541 Rev. Alonso Macias 40+ Member $39,700 $0 $14,400 Rev. Jason Makos 40+ Member $38,550 $0 $14,400 Rev. Joseph Mazzone 40+ Member $38,550 $0 $14,400 Rev. Linh Nguyen 40+ Member $38,550 $0 $14,400 Rev. Robert Oliver 40+ Member $40,320 $0 $14,400 Rev. Michael Boughton, SJ -[3] Member $0 $0 $0 Rev. William Brown, OMV -[3] Member $0 $0 $0 Rev. Ray Collins, CSSR 40+ Member $38,472 [8] $0 $0 Rev. Peter Gori, OSA 40+ Member $37,572 [8] $0 $0 Rev. John Hanley, OMI 40+ Member $38,472 [8] $0 $0 Rev. Francis McHugh, OFM -[3] Member $0 $0 $0 Rev. David Micgorski, OMV -[3] Member $0 $0 $0 Rev. William Waters, OSA 40+ Member $19,000 [8] $0 $0

Pastoral Council: Ms. Kathleen Allen 1.5 Member $0 $0 $0 Sr. Mary Binnom 1.5 Member $0 $0 $0 Mr. Leo Byron 1.5 Member $0 $0 $0 Mr. Kevin M. Casey 1.5 Member $0 $0 $0 Sr. Paula Coelho, SUSC 1.5 Member $0 $0 $0 Miss Ellen H. Connell 1.5 Member $0 $0 $0 Mr. Vincent J. DeBaggis 1.5 Member $0 $0 $0 Mr. Kevin Delehanty 1.5 Member $0 $0 $0 Ms. Jane Devlin 1.5 Member $0 $0 $0 Mr. Armand J. DiLando 1.5 Member $0 $0 $0

1 Reportable Compensation from Corporation Sole for any Clergy does not include any nominal monies received from related organizations for ad hoc services. 3 Less than 5 hours per week to Corporation Sole, does not include services to related entities, if any. 7 Fr. Condon’s stipend is paid by the U.S. Military. 8 Stipends are paid in full to the respective religious orders.

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Reportable Amount of Average Reportable Compensation Other Hours Position Compensation Name and Title from Compensation per from Related Corporation Not Included Week Organizations Sole [1] on W-2/1099 Dr. Patricia M. Dinneen 1.5 Member $0 $0 $0 Br. Anthony Dusza 1.5 Member $0 $0 $0 Mr. Charles Famolace 1.5 Member $0 $0 $0 Ms. Michelle Feliz 1.5 Member $0 $0 $0 Mr. Robert Gadbois 1.5 Member $0 $0 $0 Mr. Mark Garvey 1.5 Member $0 $0 $0 Mr. Louis Geoffrion 1.5 Member $0 $0 $0 Mr. Michael F. Gilroy 1.5 Member $0 $0 $0 Mr. Andrew Griswold 1.5 Member $0 $0 $0 Ms. Nancy Harrington 1.5 Member $0 $0 $0 Mr. Johnny Ip 1.5 Member $0 $0 $0 Deacon Philip H. LaFond 1.5 Member $0 $0 $0 Herb Lynch, Esq. 1.5 Member $0 $0 $0 Ms. Peggy Mann 1.5 Member $0 $0 $0 Ms. Patricia Meuse 1.5 Member $0 $0 $0 Mrs. Sharon M. Moore 1.5 Member $0 $0 $0 Mr. John F. Moran 1.5 Member $0 $0 $0 Mr. Philip Moran 1.5 Member $0 $0 $0 Mr. Thomas J. Nuttall 1.5 Member $0 $0 $0 Ms. Maureen O'Brien 1.5 Member $0 $0 $0 Rev. Leonard F. O'Malley 40+ Member $41,100 $0 $14,400 Ms. Ann Paradis 1.5 Member $0 $0 $0 Mr. Thong Phamduy 1.5 Member $0 $0 $0 Ms. Suzanne Robotham 1.5 Member $0 $0 $0 Ms. Mary Ann Sadowski 1.5 Member $0 $0 $0 Mr. Joseph Sanon 1.5 Member $0 $0 $0 Dr. Kwasi Sarkodie-Mensah 1.5 Member $0 $0 $0 Deacon Louis W. Sheedy 1.5 Member $0 $0 $0 Rev. Frank J.Silva 40+ Member $40,900 $0 $14,400 Mr. A. Kevin Smith 1.5 Member $0 $0 $0 Ms. Betty Sniegoski 1.5 Member $0 $0 $0 Mr. Jim Sullivan 1.5 Member $0 $0 $0 Mr. John Sullivan 1.5 Member $0 $0 $0 Ms. Patricia Tobin 1.5 Member $0 $0 $0 Ms. Jean Ulysse 1.5 Member $0 $0 $0 Mr. David Vise 1.5 Member $0 $0 $0 Mr. Phillip J. Walsh 1.5 Member $0 $0 $0 Ms. Buffy Walsh 1.5 Member $0 $0 $0 Ms. Libby Yon 1.5 Member $0 $0 $0 Ms. Lynn A. Zofchak 1.5 Member $0 $0 $0 Cabinet (Other than Officers): Most Rev. Emilio S. Allué, SDB 40+ Vicar for Hispanic Apostolate $33,225 $0 $10,296 Sr. Marian Batho, CSJ 40+ Delegate for the Religious $47,002 [8] $0 $0 Ms. Janet Benestad 40+ Secretary for Faith Formation and $147,594 $0 $20,868 Evangelization Most Rev. John Boles 40+ Delegate for Senior Priests $21,483 $0 $6,950 Rev. David Couturier O.F.M. 40+ Director Pastoral Planning $40,772 [8] $0 $6,541 Very Rev. Arthur M. Coyle 40+ Episcopal Vicar – Merrimack $41,500 $0 $14,400 Region Mr. Terrence Donilon 40+ Secretary for Media & Public $162,596 $0 $31,193 Affairs Most Rev. John Dooher 40+ Regional Bishop – South Region $41,600 $0 $14,400

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Reportable Amount of Average Reportable Compensation Other Hours Position Compensation Name and Title from Compensation per from Related Corporation Not Included Week Organizations Sole [1] on W-2/1099 Most Rev. Walter Edyvean 40+ Regional Bishop – West Region $42,800 $0 $14,400 Very Rev. Thomas Foley 40+ Secretary for Parish Life and $39,150 $0 $14,400 Leadership Dr. Mary Grassa O’Neill 40+ Secretary for Education $322,730 $0 $28,703 Rev. Bryan Hehir 40+ Secretary for Health and Social $0 [9] $0 $0 Services Most Rev. Robert Hennessey 40+ Regional Bishop – Central Region $40,700 $0 $14,400 Most Rev. Francis X. Irwin 40+ Auxiliary Bishop $21,483 $0 $6,950 Most Rev. Arthur Kennedy -[3] Saint John Seminary Rector $0 $42,250 $14,400 Rev. Robert Kickham 40+ Chief Secretary to the Cardinal $38,800 $0 $14,400 Very Rev. Mark O'Connell 40+ Judicial Vicar $40,200 $7,000 $14,400 Rev. Robert W. Oliver, BH 40+ Assistant to the Moderator of the $40,320 $0 $14,400 Curia for Canonical Affairs Very Rev. William B. Palardy -[3] Rector, Blessed John XXIII $0 $40,000 $14,400 Seminary Very Rev. Bryan K. Parrish 40+ Assistant Vicar for Administration $37,400 $0 $14,400 and Special Assistant to the Vicar General Most Rev. Peter J. Uglietto 40+ Regional Bishop – North Region $40,800 $0 $14,400 Ms. Kathleen Driscoll -[3] Secretary for Institutional $0 $38,462 $2,385 Advancement Mr. Scot Landry -[3] Secretary for Catholic Media $0 $261,217 [10 $34,174 Other Key Employees Whose Reportable Compensation is Greater than $150,000 Mr. Mark Dunderdale 40+ Director of the office of $200,058 $0 $21,717 Professional Standards and Oversight Mr. James Walsh 40+ Associate School Superintendent $180,825 $0 $32,721 Mr. Francis O’Connor 40+ Asst. General Counsel $180,092 $0 $18,884 Mr. Joseph McEnness 40+ Director of Risk Management $153,765 $0 $30,426 Total number of individuals other than current officers, council members and key employees who received more than 7 $100,000 in reportable compensation from Corporation Sole.

1 Reportable Compensation from Corporation Sole for any Clergy does not include any nominal monies received from related organizations for ad hoc services. 3 Less than 5 hours per week to Corporation Sole, does not include services to related entities, if any. 8 Stipends are paid in full to the respective religious orders. 9 Fr. Hehir is paid as a faculty member of Harvard University. 10 Compensation includes $24,045 in earned but unused vacation pay, which was paid out in connection with the transfer of employment from Corporation Sole to Boston Catholic Television Center, Inc., a separate but related entity. Mr. Landry’s base salary remains $250,000.00. 10

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Reportable Amount of Average Reportable Compensation Other Hours Position Compensation Name and Title from Compensation per from Related Corporation Not Included Week Organizations Sole [1] on W-2/1099

Former Officers or Employees Whose Reportable Compensation is Greater Than $100,000 Mr. Glen Mattera 40+ Director of Finance and IT $171,075 $0 $22,612 Mr. John Sheehan 40+ Associate School Superintendent $135,745 $0 $18,926 None Former Officers and Council Members Whose Reportable Compensation is Greater Than $10,000 None

Five Highest Compensated Independent Contractors Who Received More Than $100,000 Amount of other Reportable compensation from Vendor Services Provided compensation not included Corporation Sole on form 1099 1. Shawmut Design & Construction Construction $8,941,698 $0 2. Deiulis Bros. Construction Co. Construction $5,312,100 $0 3. FM Global Insurance Broker $2,837,100 $0 4. Folan Waterproofing, Inc. Construction $1,956,717 $0 5. Santini, Inc. Construction $1,625,553 $0 Total number of compensated independent contractors who received more than $100,000. 61

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SECTION 6 – Compensation Committee Report

REPORT OF THE COMPENSATION COMMITTEE OF THE ARCHDIOCESAN FINANCE COUNCIL

The Charter of the Finance Council establishes a Compensation Committee with responsibility for overseeing and making recommendations regarding the compensation of senior lay executive employees. The Committee has the following principal functions:

1. To determine which employees are “senior lay executives”; 2. To develop and submit to the Finance Council for its review and for approval by the Archbishop a statement of compensation philosophy for those executives; 3. To review and recommend to the Archbishop all changes in senior lay executive compensation; 4. To perform an annual review of compensation for senior lay executives to ensure that it falls within ranges that are consistent with the approved compensation philosophy, and where a deviation is observed, to determine that there is an acceptable reason or recommend corrective action; 5. To submit to the Finance Council an annual report on compensation practices; and 6. To appoint a qualified independent compensation consultant to advise the Committee and to conduct an analysis of competitive compensation practices.

The Committee has determined that all employees of the corporation sole and all members of the Cardinal’s Cabinet paid $150,000 or more in annual salary will be treated as “senior lay executives.” At present, that group comprises 17 individuals. The Committee reached that decision because this definition captured all executives heading major departments and functions, as well as others with critical areas of responsibility.

A draft statement of Compensation Philosophy for Senior Lay Executives has been prepared by the Committee and will be submitted to the Finance Council for consideration at its regularly scheduled meeting in February 2012. In developing the draft, the Committee has placed the employment and compensation of senior lay executives in the context of the Church’s mission and challenges. It is the Committee’s belief that the Church is best served by senior executives who are distinguished by their competence, compassion, efficiency and effectiveness. We believe that the compensation of those executives should enable the Archdiocese to attract and retain highly talented and motivated people whose achievements and personal goals are in harmony with the teaching and mission of the Catholic Church. We will stress the importance of compensation that is just, both in terms of internal equity and external competitiveness. External competitiveness will be measured by comparison with other organizations in the same market for talent. For all positions, this will include Catholic dioceses and archdioceses and not-for-profit organizations. Hiring for some positions requires that the Archdiocese compete with for-profit businesses, and for those jobs, compensation practices in that sector will also be taken into account. The Committee recognizes that senior lay executive compensation must reflect economic realities within the Archdiocese, as well as regionally and nationally. We think it is critical that we achieve consistency and adherence to common reward principles within the executive leadership team and that compensation for this group be based on merit, and linked to clear descriptions of responsibilities and regular performance assessments.

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The Committee has engaged the services of a senior consultant specializing in not-for-profit executive compensation at the global firm of Aon Hewitt. At the Committee’s direction, its consultant has undertaken a survey of compensation practices at nine other dioceses and archdioceses in the United States, and reviewed compensation information in public and proprietary databases of not-for-profit institutions and for-profit businesses. The 17 senior lay executive positions in the Archdiocese of Boston are being matched, based on job responsibilities and reporting levels, with those of other organizations, and pay levels are being compared. The survey results will also be used to create recommended salary bands for each position, as guidance in future compensation decision-making. We anticipate that the Committee will be in a position to make recommendations regarding salary levels in conjunction with the annual performance reviews scheduled for the end of the current fiscal year.

Members of the Compensation Committee: Paul W. Sandman, Chair John H. McCarthy, Vice Chair, Finance Council Rev. James J. Ronan Brian P. Concannon Mary L. Ryan Rev. Michael E. Drea Leo V. Sullivan

January 12, 2012

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SECTION 7 – Funding for Abuse Settlements and Related Costs

FISCAL YEAR 2011 FUNDING FOR ABUSE SETTLEMENTS AND RELATED COSTS

PASTORAL RESPONSE, ABUSE PREVENTION AND SETTLEMENTS RELATED TO SEXUAL ABUSE

Costs for Pastoral Response and Abuse Prevention and Training In fiscal year 2011, the Archdiocese expended $2.4 million to cover the expenses associated with administering abuse prevention efforts and funding outreach to promote healing and reconciliation with survivors and others harmed by sexual abuse. That figure includes the expenses incurred by three principal offices of the Archdiocese: the Office of Volunteer Resources (which conducts annual CORI checks of clergy, employees and volunteers), the Office of Child Advocacy, Implementation, and Oversight (which oversees abuse prevention training), and the Office of Pastoral Support and Outreach (which administers the program of the Archdiocese to fund therapy and related services to survivors of abuse). Under the program administered by the Office of Pastoral Support and Outreach, the Archdiocese funds regular therapy and related medications. This support is available whether or not the survivor has brought a claim against the Archdiocese, and continues to be available after a claim has been settled. In fiscal year 2011, the program funded therapy for 284 individuals at a cost of $1.4 million.

Sexual Abuse Settlements During fiscal year 2011, the total amount expended by the Archdiocese to settle claims arising from sexual abuse was $1.7 million. This represents payments on 23 settlements.

Other Costs Related to Sexual Abuse Matters In addition to the moneys paid in settlements and the costs of its pastoral response and abuse prevention programs, the Archdiocese incurred an additional $700,000 in costs to respond to and facilitate the settlement of sexual abuse claims during the past fiscal year. These costs were comprised principally of legal costs as well as expenses for mediation and arbitration.

Summary of Costs Taking into account the total cost of the sexual abuse settlements ($1.7 million) as well as the costs incurred by the Archdiocese related to the abuse prevention, outreach and other costs ($3.1 million), the Archdiocese expended a total of $4.8 million during the fiscal year 2011.

SOURCES OF FUNDS The Archdiocese has funded the settlements and other costs related to the sexual abuse claims in fiscal 2011 from real estate property sales, rental income and insurance funds. These sources have been sufficient to cover the costs of settlement and related expenses described above. It should be made clear, consistent with past practices, that parish funds, money raised from the Promise for Tomorrow Campaign, the Annual Catholic Appeal, and proceeds from the parish reconfiguration process are not being used to fund settlements.

Self-Insurance In fiscal year 2011, the Archdiocese, through the Self-Insurance fund, expended $208,000 to settle claims related to sexual abuse, offset by $172,000 of recoveries from an insurance company that was to be fully used to fund settlements, resulting in a net amount of $36,000. The self-insurance program also provided $2.6 million of funding to cover the expenses associated with administering abuse prevention efforts and outreach to promote healing and reconciliation with survivors and others harmed by sexual abuse.

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Property Sales and Rental Income During fiscal year 2011, the Archdiocese used $1.9 million from the proceeds of the 2007 administrative property sales to fund settlements related to sexual abuse claims and a portion of the legal fees and mediation costs related to claims. Rental income earned during the fiscal year was used to fund the remaining legal costs of $300,000.

FUTURE REPORTS The Archdiocese will regularly provide supplemental financial information regarding any future settlements of sexual abuse claims and the sources of funds for those settlements.

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SECTION 8 – Related Organizations

Compendium of Audited Financial Statements of Corporation Sole Related Organizations

Listing of Related Organizations

Catholic Media and Evangelization Boston Catholic Television Center, Inc.

Cemeteries Catholic Cemetery Association of the Archdiocese of Boston, Inc. (The)

Community Relations Massachusetts Catholic Conference, Inc.

Education Archbishop Williams High School, Inc. Bishop Fenwick High School, Inc. Cardinal Spellman High School, Inc. Cathedral High School, Inc. Lawrence Catholic Academy of Lawrence, Massachusetts, Inc. Lowell Catholic High School, Inc. Marian High School, Inc. Matignon High School, Inc. Cristo Rey Boston High School, Inc. Pope John Paul II Catholic Academy, Inc. Pope John XXIII High School, Inc. Quincy Catholic Academy of Quincy, Massachusetts, Inc. St. Ann’s School of Cape Ann, MA Inc. St. Columbkille School, Inc. St. Mary's High School, Inc. St. Sebastian's School, Inc. Ste. Jean d’Arc School of Lowell, Massachusetts, Inc. Trinity Catholic Academy, Inc.

Development

Catholic Foundation of the Archdiocese of Boston, Inc. (The) Catholic School Foundation, Inc. Cristo Rey Work Study Program, Inc. Fund for Catholic Schools, Inc. (The) St. Mary's High School Foundation, Inc. St. Sebastian's School Fund, Inc.

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Health, Retirement & Investment Trusts Archdiocese of Boston Clergy Benefit Funding Trust Archdiocese of Boston Clergy Retirement Trust Archdiocese of Boston Clergy Medical / Hospitalization Trust Benefit Trust for non-Incardinated Priests Duly Assigned for Service in the Archdiocese of Boston Caritas Christi Retirement Plan and Trust Common Investment Fund, Roman Catholic Archbishop of Boston Fixed Income Investment Fund, RCAB Massachusetts Catholic Self-Insurance Group, Inc. RCAB Collective Investment Partnership Roman Catholic Archdiocese of Boston Health Benefit Trust Roman Catholic Archdiocese of Boston Life Insurance and Accidental Death, Dismemberment & Long-Term Disability Insurance Trust Pension Plan & Trust of the Roman Catholic Archdiocese of Boston Roman Catholic Archdiocese of Boston Transition Assistance Program Trust

Ministerial Blessed John XXIII National Seminary, Inc. St. John's Seminary Regina Cleri, Inc. Redemptoris Mater House of Formation, Inc.

Mission Related Missionary Society of St. James the Apostle (The) Society for Propagation of the Faith of Boston, Inc. (The)

Social Service Catholic Charitable Bureau of the Archdiocese of Boston, Inc. Irish Pastoral Centre of the Archdiocese of Boston, Inc. (The) Life Resources, Inc. Office of Outreach, Assistance, Education and Prevention of the Archdiocese of Boston, Inc. (The) Planning Office for Urban Affairs, Inc. St. Ann's Home, Inc. St. Mary’s Women and Children’s Center, Inc.

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SECTION 9 – Corporation Sole Parishes

COMPENDIUM OF FINANCIAL REPORTS OF CORPORATION SOLE PARISHES

For financial reports of the parishes of the Archdiocese of Boston, if available, please visit our website at http://www.bostoncatholic.org and click on the Offices & Services tab and click on Finance, listed alphabetically. Thank you.

Parishes of the Archdiocese of Boston

City/Town Parish

Abington Saint Bridget Parish Acton Saint Elizabeth of Hungary Parish Allston Saint Anthony Parish Amesbury Holy Family Parish Andover Saint Augustine Parish Andover Saint Robert Bellarmine Parish Arlington Saint Agnes Parish Arlington Saint Camillus Parish Ashland Saint Cecilia Parish Avon Saint Michael Parish Ayer Saint Mary Parish Bedford Saint Michael Parish Bellingham Saint Brendan Parish Bellingham Saint Blaise Parish Belmont Saint Joseph Parish Belmont Saint Luke Parish Beverly Saint Mary Star of the Sea Parish Beverly Saint John the Evangelist Parish Beverly Farms Saint Margaret Parish Billerica Saint Mary Parish Billerica Saint Theresa of Lisieux Parish Boston Cathedral of the Holy Cross Parish Boston Saint Cecilia Parish Boston Saint James the Greater Parish Boston Saint Leonard of Port Maurice Parish Boston Our Lady of Victories Parish Boston Saint Joseph Parish Bradford Sacred Hearts Parish Braintree Saint Clare Parish Braintree Saint Francis of Assisi Parish Braintree Saint Thomas More Parish Bridgewater Saint Thomas Aquinas Parish Brighton Saint Columbkille Parish Brockton Our Lady of Lourdes Parish Brockton Saint Patrick Parish Brockton Saint Edith Stein Parish Brockton Christ the King Parish Brookline Saint Mary of the Assumption Parish Burlington Saint Margaret Parish Burlington Saint Malachy Parish Cambridge Saint Anthony Parish Cambridge Saint Francis of Assisi Parish Cambridge Saint John the Evangelist Parish

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Cambridge Saint Mary of Annunciation Parish Cambridge Saint Paul Parish Cambridge Saint Peter Parish Cambridge Sacred Heart of Jesus Parish Canton Saint Gerard Majella Parish Canton Saint John the Evangelist Parish Carlisle Saint Irene Parish Carver Our Lady of Lourdes Parish Charlestown Saint Francis de Sales Parish Charlestown St Mary - St Catherine Chelmsford Saint Mary Parish Chelsea Our Lady of Grace Parish Chelsea Saint Rose of Lima Parish Chelsea Saint Stanislaus Parish Cohasset Saint Anthony Parish Concord Holy Family Parish Danvers Saint Mary of the Annunciation Parish Danvers Saint Richard of Chichester Parish Dedham Saint Mary Parish Dedham Saint Susanna Parish Dorchester Saint Ambrose Parish Dorchester Saint Ann Parish Dorchester Saint Brendan Parish Dorchester Saint Christopher Parish Dorchester Saint Gregory Parish Dorchester Saint Mark Parish Dorchester Saint Matthew Parish Dorchester Holy Family Parish Dorchester Saint Peter Parish Dorchester Blessed Mother Teresa of Calcutta Parish Dover Most Precious Blood Parish Dracut Saint Francis of Assisi Parish Dracut Saint Marguerite D'Youville Parish Duxbury Holy Family Parish E Bridgewater Saint John the Evangelist Parish East Boston Saint Joseph - St Lazarus Parish East Boston Most Holy Redeemer Parish East Boston Our Lady of the Assumption Parish East Boston Sacred Heart Parish East Walpole Saint Mary Parish East Weymouth Saint Albert the Great Parish East Weymouth Immaculate Conception Parish Essex Saint John the Baptist Parish Everett Saint Anthony of Padua Parish Everett Immaculate Conception Parish Foxboro Saint Mary Parish Framingham Saint Bridget Parish Framingham Saint George Framingham Saint Stephen Parish Framingham Saint Tarcisius Parish Franklin Saint Mary Parish Georgetown Saint Mary Parish Gloucester Our Lady of Good Voyage Parish Gloucester Holy Family Parish Green Harbor Our Lady of the Assumption Parish Hanover Saint Mary Sacred Heart Parish

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Hanson Saint Joseph the Worker Parish Haverhill Saint James Parish Haverhill Saint John the Baptist Parish Haverhill All Saints Parish Hingham Saint Paul Parish Hingham Resurrection Parish Holbrook Saint Joseph Parish Holliston Saint Mary Parish Hopkinton Saint John the Evangelist Parish Hudson Saint Michael Parish Hull Saint Mary of the Assumption Parish Hyde Park Saint Adalbert Parish Hyde Park Most Precious Blood Parish Ipswich Our Lady of Hope Parish Jamaica Plain Our Lady of Lourdes Parish Jamaica Plain Saint Thomas Aquinas Parish Kingston Saint Joseph Parish Lakeville Saints Martha and Mary Parish Lawrence Saint Patrick Parish Lawrence Saint Mary of the Assumption Parish Lawrence Corpus Christi Parish Lexington Saint Brigid Parish Lexington Sacred Heart Parish Littleton Saint Anne Parish Lowell Saint Anthony Parish Lowell Holy Trinity Parish Lowell Immaculate Conception Parish Lowell Saint Margaret Parish Lowell Holy Family Parish Lowell Saint Michael Parish Lowell Saint Patrick Parish Lowell Saint Rita Parish Lynn Holy Family Parish Lynn Saint Joseph Parish Lynn Saint Mary Parish Lynn Saint Pius V Parish Lynnfield Saint Maria Goretti Parish Lynnfield Our Lady of the Assumption Parish Malden Immaculate Conception Parish Malden Saint Joseph Parish Malden Sacred Hearts Parish Manchester-by-the-Sea Sacred Heart Parish Manomet Saint Bonaventure Parish Marblehead Our Lady Star of the Sea Parish Marlboro Immaculate Conception Parish Marlboro Saint Matthias Parish Marshfield Saint Ann By the Sea Parish Marshfield Saint Christine Parish Mattapan Saint Angela Merici Parish Maynard Saint Bridget Parish Medfield Saint Edward the Confessor Parish Medford Saint Francis of Assisi Parish Medford Saint Joseph Parish Medford Saint Raphael Parish Medford Saint Clement Parish Medway Saint Joseph Parish

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Melrose Incarnation Parish Melrose Saint Mary of the Annunciation Parish Merrimac Holy Redeemer Parish Methuen Our Lady of Good Counsel Parish Methuen Saint Lucy Parish Methuen Saint Monica Parish Middleboro Sacred Heart Parish Middleton Saint Agnes Parish Millis Saint Thomas the Apostle Parish Milton Saint Agatha Parish Milton Saint Elizabeth Parish Milton Saint Mary of the Hills Parish Milton Saint Pius Tenth Parish Monponsett Our Lady of the Lake Parish Nahant Saint Thomas Aquinas Parish Natick Saint Linus Parish Natick Saint Patrick Parish Needham Saint Bartholomew Parish Needham Saint Joseph Parish Newburyport Immaculate Conception Parish Newton Corpus Christi-Saint Bernard Parish Newton Saint Ignatius Loyola Parish Newton Our Lady Help of Christians Parish Newton Sacred Heart Parish Newton Upper Falls Mary Immaculate of Lourdes Parish Norfolk Saint Jude Parish North Andover Saint Michael Parish North Billerica Saint Andrew Parish North Chelmsford Saint John the Evangelist Parish North Reading Saint Theresa of Lisieux Parish North Weymouth Saint Jerome Parish Norwell Saint Helen Parish Norwood Saint Catherine of Siena Parish Norwood Saint Timothy Parish Peabody Saint Adelaide Parish Peabody Saint Ann Parish Peabody Saint John the Baptist Parish Peabody Saint Thomas the Apostle Parish Peabody Our Lady of Fatima Parish No Pembroke Our Lady of Grace Pepperell Our Lady of Grace Plainville Saint Martha Parish Plymouth Saint Mary Parish Plymouth Saint Peter Parish Plymouth Blessed Kateri Tekakwitha Parish Point Shirley Holy Rosary Parish Quincy Saint John the Baptist Parish Quincy Saint Joseph Parish Quincy Sacred Heart Parish Quincy Holy Trinity Parish Randolph Saint Bernadette Parish Randolph Saint Mary Parish Reading Saint Agnes Parish Reading Saint Athanasius Parish Readville Saint Anne Parish Revere Immaculate Conception Parish

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Revere Saint Mary of the Assumption Parish Revere Saint Anthony of Padua Parish Rockland Holy Family Parish Roslindale Sacred Heart Parish Roxbury Saint Mary of the Angels Parish Roxbury Our Lady of Perpetual Help Parish Roxbury Saint Patrick Parish Roxbury St. Katharine Drexel Parish Salem Saint Anne Parish Salem Immaculate Conception Parish Salem Saint James Parish Salem Saint John the Baptist Parish Salisbury Star of the Sea Parish Saugus Blessed Sacrament Parish Saugus Saint Margaret Parish Scituate Saint Mary of the Nativity Parish Sharon Our Lady of Sorrows Parish Sherborn Saint Theresa of Lieieux Parish Shirley Saint Anthony Parish Somerville Saint Ann Parish Somerville Saint Anthony Parish Somerville Saint Benedict Parish Somerville Saint Catherine of Genoa Parish Somerville Patronage of Saint Joseph Parish South Boston Saint Brigid Parish South Boston Gate of Heaven Parish South Boston Saint Monica-St Augustine Parish South Boston Our Lady of Czestochowa Parish South Boston Saint Peter Parish South Boston Saint Vincent De Paul Parish South Hamilton Saint Paul Parish South Weymouth Saint Francis Xavier Parish Stoneham Saint Patrick Parish Stoughton Immaculate Conception Parish Stoughton Saint James Parish Stow Saint Isidore Parish Sudbury Saint Anselm Parish Sudbury Our Lady of Fatima Parish Swampscott Saint John the Evangelist Parish Tewksbury Saint William Parish Topsfield Saint Rose of Lima Parish Townsend Saint John the Evangelist Parish Tyngsboro Saint Mary Magdalen Parish Wakefield Saint Florence Parish Wakefield Saint Joseph Parish Wakefield Most Blessed Sacrament Parish Walpole Blessed Sacrament Parish Waltham Saint Charles Borromeo Parish Waltham Saint Jude Parish Waltham Saint Mary Parish Waltham Our Lady Comforter of Afflicted Parish Waltham Sacred Heart Parish Watertown Saint Patrick Parish Watertown Sacred Heart Parish Wayland Good Shepherd Parish Wellesley Saint Paul Parish

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Wellesley Hills Saint John the Evangelist Parish West Bridgewater Saint Ann Parish West Lynn Sacred Heart Parish West Quincy Saint Mary Parish West Roxbury Holy Name Parish West Roxbury Saint John Chrysostom Parish West Roxbury Saint Theresa of Avila Parish Westford Saint Catherine of Alexandria Parish Weston Saint Julia Parish Westwood Saint Denis Parish Westwood Saint Margaret Mary Parish Weymouth Sacred Heart Parish Whitman Holy Ghost Parish Wilmington Saint Dorothy Parish Wilmington Saint Thomas of Villanova Parish Winchester Saint Eulalia Parish Winchester Saint Mary Parish Winthrop Saint John the Evangelist Parish Woburn Saint Anthony of Padua Parish Woburn Saint Barbara Parish Woburn Saint Charles Borromeo Parish Woburn Saint Joseph Parish * Wollaston Saint Ann Parish Wrentham Saint Mary Parish

* St. Joseph Parish – Woburn closed on June 15, 2011

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