Return of Private Foundation OMB No. 1545-0052 Form 990-PF or Section 4947(a)(1) Nonexempt Charitable Trust Department of the Treasury Treated as a Private Foundation Internal Revenue Service Note: The foundation may be able to use a copy of this return to satisfy state reporting requirements. À¾´» For calendar year 2007, or tax year beginning , 2007, and ending G Check all that apply: Initial return Final return Amended return Address change Name change Name of foundation A Employer identification number Use the IRS label. THE WILLIAM & FLORA HEWLETT FOUNDATION 94-1655673 Otherwise, Number and street (or P.O. box number if mail is not delivered to street address) Room/suite B Telephone number (see page 10 of the instructions) print or type. See Specific 2121 SAND HILL ROAD (650) 234-4500 City or town, state, and ZIP code C If exemption application is Instructions. pending, check here mmmmmmmI D 1. Foreign organizations, check here m I MENLO PARK, CA 94025 2. Foreign organizations meeting the 85% test, check here and attach H Check type of organization:X Section 501(c)(3) exempt private foundation computation mmmmmmmmmI Section 4947(a)(1) nonexempt charitable trust Other taxable private foundation E If private foundation status was terminated I Fair market value of all assets at end J Accounting method: CashX Accrual under section 507(b)(1)(A), check here m I of year (from Part II, col. (c), line Other (specify) F If the foundation is in a 60-month termination 16) I $ 9,890,037,555. (Part I, column (d) must be on cash basis.) under section 507(b)(1)(B), check here m I Part I Analysis of Revenue and Expenses (The (d) Disbursements total of amounts in columns (b), (c), and (d) (a) Revenue and (b) Net investment (c) Adjusted net for charitable may not necessarily equal the amounts in expenses per income income purposes books column (a) (see page 11 of the instructions).) (cash basis only) 1 Contributions, gifts, grants, etc., received (attach schedule) m 1,000. if the foundation is not required to 2 Check I X attach Sch. B 3 Interest on savings and temporary cash investments 1,426,295. 1,426,295. 4 Dividends and interest from securities mmmm 132,792,617. 269,250,393. 5a Gross rents mmmmmmmmmmmmmmmmm b Net rental income or (loss) 6a Net gain or (loss) from sale of assets not on line 10 671,802,621. b Gross sales price for all assets on line 6a 7 Capital gain net income (from Part IV, line 2) m 765,044,134. Revenue 8 Net short-term capital gain mmmmmmmmm 9 Income modifications mmmmmmmmmmmm 10 a Gross sales less returns and allowances mmmmm b Less: Cost of goods sold m c Gross profit or (loss) (attach schedule) mmmm 11 Other income (attach schedule) mmmmmmm 62,113,037. -42,252,780. STMT 70 12 Total. Add lines 1 through 11 mmmmmmmm 868,135,570. 993,468,042. 13 Compensation of officers, directors, trustees, etc. mm 2,090,858. 1,135,659. 955,199. 14 Other employee salaries and wages mmmmm 11,314,979. 3,402,078. 7,889,633. 15 Pension plans, employee benefits mmmmmm 3,992,625. 1,381,383. 1,801,218. 16a Legal fees (attach schedule) mmmmmmmmmSTMT 71 728,013. 474,234. NONE 253,779. b Accounting fees (attach schedule)STMTmmmmmm 72 346,004. 172,753. NONE 173,251. c Other professional fees (attach schedule)STMT mmm73 33,694,496. 20,485,744. 13,190,600. 17 Interest mmmmmmmmmmmmmmmmmmm 315,150. 315,150. 18 Taxes (attach schedule) (see page 14 of the instructions)** 28,507,856. 6,587. 19 Depreciation (attach schedule) and depletion m 2,008,114. 292,582. 20 Occupancy mmmmmmmmmmmmmmmmm 979,552. 142,721. 836,831. 21 Travel, conferences, and meetings mmmmmm 2,411,402. 314,528. 2,096,874. 22 Printing and publications mmmmmmmmmm 56,194. 56,194. 23 Other expenses (attach schedule) STMTmmmmmm 75 2,256,517. 108,098. 2,148,419. 24 Total operating and administrative expenses. Add lines 13 through 23 mmmmmmmmmm 88,701,760. 27,916,367. NONE 29,717,148. Operating and Administrative Expenses Operating and Administrative 25 Contributions, gifts, grants paid mmmmmmm 474,920,035. 427,657,803. 26 Total expenses and disbursements. Add lines 24 and 25 563,621,795. 27,916,367. NONE 457,374,951. 27 Subtract line 26 from line 12: a Excess of revenue over expenses and disbursements mm 304,513,775. b Net investment income (if negative, enter -0-) 965,551,675. c Adjusted net income (if negative, enter -0-) mm -0- For Privacy Act and Paperwork Reduction Act Notice, see page 30 of the instructions. **STMT 74 Form 990-PF (2007) JSA 7E1410 4.000 18104U 1673 V07-8.3 Form 990-PF (2007) 94-1655673 Page 2 Attached schedules and amounts in the Beginning of year End of year Part II Balance Sheets description column should be for end-of-year amounts only. (See instructions.) (a) Book Value (b) Book Value (c) Fair Market Value 1 Cash - non-interest-bearing mmmmmmmmmmmmmmmmmm 9,793. 9,336. 9,336. 2 Savings and temporary cash investments mmmmmmmmmmm 357,734,119. 469,927,600. 469,927,600. 3 Accounts receivable I 477,320,857. Less: allowance for doubtful accounts I 198,792,659. 477,320,857. 477,320,857. 4 Pledges receivable I 25,660,000. Less: allowance for doubtful accounts I 30,085,805. 25,660,000. 25,660,000. 5 Grants receivable mmmmmmmmmmmmmmmmmmmmmm 2,300,000. 6 Receivables due from officers, directors, trustees, and other disqualified persons (attach schedule) (see page 16 of the instructions) 7 Other notes and loans receivable (attach schedule) I Less: allowance for doubtful accounts I 8 Inventories for sale or use mmmmmmmmmmmmmmmmmm 9 Prepaid expenses and deferred charges mmmmmmmmmmmm 452,864. 1,359,747. 1,359,747. a Assets 10 Investments - U.S. and state government obligations (attach schedule)**m 285,619,189. 317,304,704. 317,304,704. b Investments - corporate stock (attach schedule) mmmmmmmmSTMT 77 4,326,873,020. 3,791,913,948. 3,791,913,948. c Investments - corporate bonds (attach schedule)mmmmmmmmSTMT 78 481,433,306. 413,767,491. 413,767,491. 11 Investments - land, buildings, and equipment: basis I Less: accumulated depreciation (attach schedule) I 2,674,002. 12 Investments - mortgage loans mmmmmmmmmmmmmmmm 13 Investments - other (attach schedule) STMT 79 2,794,809,131. 4,358,847,424. 4,358,847,424. 14 Land, buildings, and mmmmmmmmmmmmm equipment: basis I 32,460,970. Less: accumulated depreciation (attach schedule) I 33,573,460. 32,460,970. 32,460,970. 15 Other assets (describeI STMT 80 ) 1,998,991. 1,465,478. 1,465,478. 16 Total assets (to be completed by all filers - see the instructions. Also, see page 1, item I) mmmmmmmmmmmmm 8,516,356,339. 9,890,037,555. 9,890,037,555. 17 Accounts payable and accrued expenses mmmmmmmmmmm 190,904,820. 658,766,023. 18 Grants payable mmmmmmmmmmmmmmmmmmmmmmm 282,202,621. 329,007,041. 19 Deferred revenue mmmmmmmmmmmmmmmmmmmmmm 20 Loans from officers, directors, trustees, and other disqualified persons m 21 Mortgages and other notes payable (attach schedule) mmmmm 90,000,000. STMT 81 Liabilities 22 Other liabilities (describeI STMT 82 ) 22,549,759. 24,572,992. 2 3 Total liabilities (add lines 17 through 22) mmmmmmmmmmm 495,657,200. 1,102,346,056. Foundations that follow SFAS 117, check here I X and complete lines 24 through 26 and lines 30 and 31. 24 Unrestricted mmmmmmmmmmmmmmmmmmmmmmmmm 7,980,613,334. 8,759,346,937. 25 Temporarily restricted mmmmmmmmmmmmmmmmmmmm 40,085,805. 28,344,562. 26 Permanently restricted mmmmmmmmmmmmmmmmmmmm Foundations that do not follow SFAS 117, Fund Balances check here and complete lines 27 through 31. I 27 Capital stock, trust principal, or current funds mmmmmmmmm 28 Paid-in or capital surplus, or land, bldg., and equipment fund mmmmm 29 Retained earnings, accumulated income, endowment, or other funds mm 30 Total net assets or fund balances (see page 17 of the Net Assets or instructions) mmmmmmmmmmmmmmmmmmmmmmmmm 8,020,699,139. 8,787,691,499. 31 Total liabilities and net assets/fund balances (see page 17 of the instructions) mmmmmmmmmmmmmmmmmmmmmm 8,516,356,339. 9,890,037,555. Part III Analysis of Changes in Net Assets or Fund Balances 1 Total net assets or fund balances at beginning of year - Part II, column (a), line 30 (must agree with end-of-year figure reported on prior year's return) mmmmmmmmmmmmmmmmmmmmmmmmmmmmmm 1 8,020,699,139. 2 Enter amount from Part I, line 27a mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm 2 304,513,775. 3 Other increases not included in line 2 (itemize) I SEE STATEMENT 83 3 462,478,585. 4 Add lines 1, 2, and 3 mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm 4 8,787,691,499. 5 Decreases not included in line 2 (itemize) I 5 6 Total net assets or fund balances at end of year (line 4 minus line 5) - Part II, column (b), line 30 mmmmm 6 8,787,691,499. JSA **STMT 76 Form 990-PF (2007) 7E1420 2.000 18104U 1673 V07-8.3 Form 990-PF (2007) 94-1655673 Page 3 Part IV Capital Gains and Losses for Tax on Investment Income (b) How (c) Date (a) List and describe the kind(s) of property sold (e.g., real estate, acquired acquired (d) Date sold P-Purchase (mo., day, yr.) 2-story brick warehouse; or common stock, 200 shs. MLC Co.) D-Donation (mo., day, yr.) 1a SEE PART IV SCHEDULE b c d e (f) Depreciation allowed (g) Cost or other basis (h) Gain or (loss) (e) Gross sales price (or allowable)plus expense of sale (e) plus (f) minus (g) a b c d e Complete only for assets showing gain in column (h) and owned by the foundation on 12/31/69 (l) Gains (Col.