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The report accompanying these financial statements was issued by BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of BDO International Limited, a UK company limited by guarantee.

Christian Reformed World Missions of the United States of America and Christian Reformed World Missions of Canada Combined Financial Statements and Supplementary Information Years Ended June 30, 2012 and 2011

Christian Reformed World Missions of the United States of America and Christian Reformed World Missions of Canada

Combined Financial Statements and Supplementary Information Years Ended June 30, 2012 and 2011


Contents

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Independent Accountant’s Review Report 3 Combined Financial Statements

Statements of Financial Position as of June 30, 2012 and 2011 5-6 Statements of Activities for the Years Ended June 30, 2012 and 2011 7-8 Statements of Functional Expenses for the Years Ended June 30, 2012 and 2011 9-10 Statements of Changes in Net Assets for the Years Ended June 30, 2012 and 2011 11 Statements of Cash Flows for the Years Ended June 30, 2012 and 2011 12 Notes to Financial Statements 13-21

Supplementary Information Independent Accountant’s Review Report on Supplementary Information 23 Combining Summary of Financial Position Information – United States, International and Canada in United States Dollars, and Canada in Canadian Dollars 24-25 Combining Summary of Activities Information – United States, International and Canada in United States Dollars, and Canada in Canadian Dollars 26-27

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BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

Independent Accountant’s Review Report Boards of Directors Christian Reformed World Missions of the United States of America and Christian Reformed World Missions of Canada Grand Rapids, Michigan We have reviewed the accompanying combined statements of financial position of Christian Reformed World Missions of the United States of America and Christian Reformed World Missions of Canada (collectively, the Organization) as of June 30, 2012 and 2011, and the related combined statements of activities, functional expenses, changes in net assets and cash flows for the years then ended. A review primarily includes applying analytical procedures to management’s financial data and making inquiries of Organization management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion. Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States, and for designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements. Our responsibility is to conduct the reviews in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to perform procedures to obtain limited assurance that there are no material modifications that should be made to the financial statements. We believe that the results of our procedures provide a reasonable basis for our report. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States.

November 1, 2012

Combined Financial Statements


Combined Statements of Financial Position

5

Temporarily Permanently

June 30, 2012 Operating Designated Total Restricted Restricted Total

Assets

Cash and cash equivalents 1,753,118$ 491,100$ 2,244,218$ 553,213$ -$ 2,797,431$

Investments held by Christian Reformed Church in North America Foundation 732,149 1,595,576 2,327,725 449,797 770,574 3,548,096

Other investments - - - - 425,106 425,106

Field advances 534,659 - 534,659 - - 534,659

Receivables from missionaries 146 - 146 - - 146

Due from the Christian Reformed Church in North America 49,000 - 49,000 - - 49,000

Interest and other receivables 100,623 5,766 106,389 1,625 - 108,014

Inventory 19,571 - 19,571 - - 19,571

Prepaid expenses 533 - 533 - - 533

Land, buildings, furniture and equipment 765,947 - 765,947 - - 765,947

Less: accumulated depreciation (284,147) - (284,147) - - (284,147)

Total Assets 3,671,599$ 2,092,442$ 5,764,041$ 1,004,635$ 1,195,680$ 7,964,356$

Liabilities and Net Assets

Liabilities

Accounts payable and accrued expenses 1,019,110$ 197,144$ 1,216,254$ -$ -$ 1,216,254$

Annuities payable 172,245 - 172,245 - - 172,245

Refundable advances 32,789 - 32,789 - - 32,789

Accrued termination and shipping allowances 1,284,851 - 1,284,851 - - 1,284,851

Total Liabilities 2,508,995 197,144 2,706,139 - - 2,706,139

Net Assets

Unrestricted:

Operating 1,229,550 - 1,229,550 - - 1,229,550

Designated - 1,895,298 1,895,298 - - 1,895,298

Foreign currency translation adjustment (66,946) - (66,946) - - (66,946)

Total unrestricted net assets 1,162,604 1,895,298 3,057,902 - - 3,057,902

Temporarily restricted - - - 1,004,635 - 1,004,635

Permanently restricted - - - - 1,195,680 1,195,680

Total Net Assets 1,162,604 1,895,298 3,057,902 1,004,635 1,195,680 5,258,217

Total Liabilities and Net Assets 3,671,599$ 2,092,442$ 5,764,041$ 1,004,635$ 1,195,680$ 7,964,356$

Unrestricted

See accompanying independent accountant’s review report and notes to combined financial statements.


Combined Statements of Financial Position

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June 30, 2011 Operating Designated Total Restricted Restricted Total

Assets

Cash and cash equivalents 683,913$ 518,400$ 1,202,313$ 280,519$ -$ 1,482,832$

Investments held by Christian Reformed Church in North America Foundation 729,035 2,054,538 2,783,573 482,714 693,120 3,959,407

Other investments - - - - 435,799 435,799

Field advances 710,582 - 710,582 - - 710,582

Receivables from missionaries 3,598 - 3,598 - - 3,598

Due from the Christian Reformed Church in North America 424,000 - 424,000 - - 424,000

Interest and other receivables 167,616 5,720 173,336 3,274 - 176,610

Inventory 11,264 - 11,264 - - 11,264

Prepaid expenses 10,174 - 10,174 - - 10,174

Land, buildings, furniture and equipment 808,997 - 808,997 - - 808,997

Less: accumulated depreciation (308,747) - (308,747) - - (308,747)

Total Assets 3,240,432$ 2,578,658$ 5,819,090$ 766,507$ 1,128,919$ 7,714,516$


Liabilities

Accounts payable and accrued expenses 691,278$ 187,460$ 878,738$ -$ -$ 878,738$

Payables to missionaries 790 - 790 - - 790

Annuities payable 184,905 - 184,905 - - 184,905

Refundable advances 32,482 - 32,482 - - 32,482

Other notes payable 617,360 - 617,360 - - 617,360

Accrued termination and shipping allowances 1,418,175 - 1,418,175 - - 1,418,175

Total Liabilities 2,944,990 187,460 3,132,450 - - 3,132,450

Net Assets

Unrestricted:

Operating 300,340 - 300,340 - - 300,340

Designated - 2,391,198 2,391,198 - - 2,391,198

Foreign currency translation adjustment (4,898) - (4,898) - - (4,898)

Total unrestricted net assets 295,442 2,391,198 2,686,640 - - 2,686,640

Temporarily restricted - - - 766,507 - 766,507

Permanently restricted - - - - 1,128,919 1,128,919

Total Net Assets 295,442 2,391,198 2,686,640 766,507 1,128,919 4,582,066

Total Liabilities and Net Assets 3,240,432$ 2,578,658$ 5,819,090$ 766,507$ 1,128,919$ 7,714,516$

Unrestricted



Combined Statements of Activities

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Year ended June 30, 2012 Operating Designated Total Restricted Restricted Total

Revenues and Other Support

Denominational ministry shares 4,946,070$ -$ 4,946,070$ -$ -$ 4,946,070$

Gifts and offerings:

Missionary support 5,036,813 - 5,036,813 42,872 - 5,079,685

General 2,218,472 - 2,218,472 267,567 - 2,486,039

Legacies 1,648,657 - 1,648,657 - 77,454 1,726,111

Investment income 100,734 25,312 126,046 64,391 (10,693) 179,744

Other field revenues 294,448 - 294,448 - - 294,448

Other 18,422 - 18,422 - - 18,422

Net assets released from restrictions/designations 657,914 (521,212) 136,702 (136,702) - -

Total Revenues and Other Support 14,921,530 (495,900) 14,425,630 238,128 66,761 14,730,519

Expenses

Program services:

East Africa 375,912 - 375,912 - - 375,912

West Africa 3,267,629 - 3,267,629 - - 3,267,629

Asia 2,400,930 - 2,400,930 - - 2,400,930

Latin America 4,022,193 - 4,022,193 - - 4,022,193

Europe 565,955 - 565,955 - - 565,955

Education & Global Impact 1,240,100 - 1,240,100 - - 1,240,100

Total program services 11,872,719 - 11,872,719 - - 11,872,719

Support services:

Management and general 1,035,185 - 1,035,185 - - 1,035,185

Resource development 1,084,420 - 1,084,420 - - 1,084,420

Total support services 2,119,605 - 2,119,605 - - 2,119,605

Total Expenses 13,992,324 - 13,992,324 - - 13,992,324

Changes in Net Assets 929,206$ (495,900)$ 433,306$ 238,128$ 66,761$ 738,195$

Unrestricted



Combined Statements of Activities

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Year ended June 30, 2011 Operating Designated Total Restricted Restricted Total


Denominational ministry shares 4,981,972$ -$ 4,981,972$ -$ -$ 4,981,972$


Missionary support 4,677,768 - 4,677,768 12,982 - 4,690,750

General 2,164,024 - 2,164,024 51,001 - 2,215,025

Legacies 653,266 - 653,266 - - 653,266

Investment income 279,075 60,331 339,406 143,070 45,751 528,227

Other field revenues 309,498 - 309,498 - - 309,498

Other 48,108 - 48,108 - - 48,108

Net assets released from restrictions/designations 209,535 (23,035) 186,500 (186,500) - -

Total Revenues and Other Support 13,323,246 37,296 13,360,542 20,553 45,751 13,426,846

Expenses

Program services:

East Africa 375,035 - 375,035 - - 375,035

West Africa 3,227,710 - 3,227,710 - - 3,227,710

Asia 2,213,796 - 2,213,796 - - 2,213,796

Latin America 3,968,682 - 3,968,682 - - 3,968,682

Europe 398,443 - 398,443 - - 398,443

Education & Global Impact 1,154,482 - 1,154,482 - - 1,154,482

Total program services 11,338,148 - 11,338,148 - - 11,338,148

Support services:

Management and general 879,114 - 879,114 - - 879,114

Resource development 1,196,989 - 1,196,989 - - 1,196,989

Total support services 2,076,103 - 2,076,103 - - 2,076,103

Total Expenses 13,414,251 - 13,414,251 - - 13,414,251

Changes in Net Assets (91,005)$ 37,296$ (53,709)$ 20,553$ 45,751$ 12,595$

Unrestricted



Combined Statements of Functional Expenses

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East West Latin Education & Management Resource

Year ended June 30, 2012 Africa Africa Asia America Europe Global Impact Total and General Development Total Total

Expenses

Salaries and benefits:

Salaries 67,769$ 1,320,478$ 946,499$ 1,484,203$ 239,517$ 630,617$ 4,689,083$ 319,413$ 437,331$ 756,744$ 5,445,827$

Fringe benefits 28,665 604,528 555,058 635,154 134,026 160,461 2,117,892 76,690 131,903 208,593 2,326,485

Total salaries and benefits 96,434 1,925,006 1,501,557 2,119,357 373,543 791,078 6,806,975 396,103 569,234 965,337 7,772,312

Home office costs:

Education/training 510 20,254 17,129 12,747 6,032 30,899 87,571 3,315 837 4,152 91,723

Travel 19,849 159,922 55,453 174,237 21,174 131,553 562,188 28,975 14,657 43,632 605,820

Publications/printed/AV material 15 282 222 356 44 41,790 42,709 2,353 85,434 87,787 130,496

Financial/personnel/

computer services 390 7,416 5,855 9,368 1,171 65,055 89,255 418,743 151,247 569,990 659,245

Deputation expense - - - - - 42,243 42,243 - 41,808 41,808 84,051

Operations 526 13,078 8,396 21,179 1,408 102,764 147,351 152,418 190,042 342,460 489,811

Facilities 429 8,148 6,432 10,292 1,286 34,718 61,305 33,278 31,161 64,439 125,744

Total home office costs 21,719 209,100 93,487 228,179 31,115 449,022 1,032,622 639,082 515,186 1,154,268 2,186,890

Field costs:

Missionary travel 31,114 103,442 120,631 175,959 24,036 - 455,182 - - - 455,182

Missionary housing 10,437 217,939 197,608 217,311 40,737 - 684,032 - - - 684,032

Field office costs/administration 35,272 66,197 61,110 128,138 15,932 - 306,649 - - - 306,649

Missionary education 136 17,445 28,624 39,550 2,518 - 88,273 - - - 88,273

Missionary equipment - 31,830 30,287 37,729 7,831 - 107,677 - - - 107,677

Miscellaneous 2 11,728 41,128 11,286 2,980 - 67,124 - - - 67,124

Exchange loss 7,136 17,023 11,394 17,504 640 - 53,697 - - - 53,697

Program personnel 17,774 106,785 21,697 5,000 2,105 - 153,361 - - - 153,361

Program travel 190 19,031 1,816 393 - - 21,430 - - - 21,430

Program housing 237 11,937 97 - - - 12,271 - - - 12,271

Program administration 170 51,919 1,593 386 393 - 54,461 - - - 54,461

Program education 90,414 12,194 12,296 78,768 2,819 - 196,491 - - - 196,491

Program equipment - 86,247 6,345 75,085 - - 167,677 - - - 167,677

Program grants 64,877 209,287 214,350 857,355 50,156 - 1,396,025 - - - 1,396,025

Program operations - 170,519 56,910 30,193 11,150 - 268,772 - - - 268,772

Total field costs 257,759 1,133,523 805,886 1,674,657 161,297 - 4,033,122 - - - 4,033,122

Total Expenses 375,912$ 3,267,629$ 2,400,930$ 4,022,193$ 565,955$ 1,240,100$ 11,872,719$ 1,035,185$ 1,084,420$ 2,119,605$ 13,992,324$

Program Services Support Services



Combined Statements of Functional Expenses

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East West Latin Education & Management Resource

Year ended June 30, 2011 Africa Africa Asia America Europe Global Impact Total and General Development Total Total

Expenses

Salaries and benefits:

Salaries 79,790$ 1,310,234$ 960,199$ 1,524,676$ 190,819$ 605,744$ 4,671,462$ 266,116$ 451,869$ 717,985$ 5,389,447$

Fringe benefits 28,821 653,177 436,534 596,982 76,989 145,823 1,938,326 55,681 124,853 180,534 2,118,860

Total salaries and benefits 108,611 1,963,411 1,396,733 2,121,658 267,808 751,567 6,609,788 321,797 576,722 898,519 7,508,307

Home office costs:

Education/training 520 11,825 16,837 13,834 1,039 6,891 50,946 2,985 919 3,904 54,850

Travel 6,683 95,233 51,788 209,972 4,146 103,232 471,054 34,377 19,666 54,043 525,097

Publications/printed/AV material 17 316 233 383 33 36,423 37,405 1,918 104,568 106,486 143,891

Financial/personnel/

computer services 443 8,414 6,200 10,185 886 64,082 90,210 351,776 199,134 550,910 641,120

Deputation expense - - - - - 34,311 34,311 - 35,760 35,760 70,071

Operations 847 17,074 12,376 40,656 1,476 118,624 191,053 129,842 221,258 351,100 542,153

Facilities 566 10,752 7,922 13,015 1,132 39,352 72,739 36,419 38,962 75,381 148,120

Total home office costs 9,076 143,614 95,356 288,045 8,712 402,915 947,718 557,317 620,267 1,177,584 2,125,302

Field costs:

Missionary travel 29,471 120,997 135,675 147,489 18,985 - 452,617 - - - 452,617

Missionary housing 13,634 221,057 178,345 219,074 30,416 - 662,526 - - - 662,526

Field office costs/administration 30,104 69,968 49,864 107,641 10,108 - 267,685 - - - 267,685

Missionary education 20 23,958 15,924 40,340 1,281 - 81,523 - - - 81,523

Missionary equipment 2,387 47,960 2,781 23,166 756 - 77,050 - - - 77,050

Miscellaneous 19 272 (2,113) 1,591 1,364 - 1,133 - - - 1,133

Exchange loss (gain) 8,385 1,935 (19,689) (5,541) 191 - (14,719) - - - (14,719)

Program personnel 15,206 111,406 27,744 5,860 4,376 - 164,592 - - - 164,592

Program travel - 25,366 324 318 - - 26,008 - - - 26,008

Program housing - 12,617 1,059 - - - 13,676 - - - 13,676

Program administration 1,354 37,138 9,732 - 365 - 48,589 - - - 48,589

Program education 121,252 5,373 20,137 50,073 3,861 - 200,696 - - - 200,696

Program equipment - 38,321 6,293 146,867 - - 191,481 - - - 191,481

Program grants 35,516 261,264 224,854 783,588 45,170 - 1,350,392 - - - 1,350,392

Program operations - 143,053 70,777 38,513 5,050 - 257,393 - - - 257,393

Total field costs 257,348 1,120,685 721,707 1,558,979 121,923 - 3,780,642 - - - 3,780,642

Total Expenses 375,035$ 3,227,710$ 2,213,796$ 3,968,682$ 398,443$ 1,154,482$ 11,338,148$ 879,114$ 1,196,989$ 2,076,103$ 13,414,251$

Program Services Support Services



Combined Statements of Changes in Net Assets

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Unrestricted Restricted Restricted Total

Balance, July 1, 2010 2,650,149$ 745,954$ 1,083,168$ 4,479,271$

Changes in net assets (53,709) 20,553 45,751 12,595

Foreign currency translation adjustment 90,200 - - 90,200

Balance, June 30, 2011 2,686,640 766,507 1,128,919 4,582,066

Changes in net assets 433,306 238,128 66,761 738,195

Foreign currency translation adjustment (62,044) - - (62,044)

Balance, June 30, 2012 3,057,902$ 1,004,635$ 1,195,680$ 5,258,217$



Combined Statements of Cash Flows

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Year ended June 30, 2012 2011

Cash Flows From (for) Operating Activities

Changes in net assets 738,195$ 12,595$

Adjustments to reconcile changes in net assets

to net cash from operating activities:

Change in value of annuities payable 18,913 22,742

Gain on disposal of property - (50)

Unrealized gain on investments (4,159) (413,927)

Depreciation 22,695 18,596

Decrease in other notes payable (617,360) 29,746

Changes in assets and liabilities:

Field advances 175,923 176,383

Receivables from missionaries 3,452 (3,526)

Interest and other receivables 68,593 154,770

Inventory (8,307) 4,393

Prepaid expenses 9,641 (10,174)

Accounts payable and accrued expenses 337,516 (10,580)

Payables to missionaries (790) 790

Accrued termination and shipping allowances (133,321) 75,901

Net Cash From Operating Activities 610,991 57,659

Cash Flows From (for) Investing Activities

Change in due to the Christian Reformed Church in North America 375,000 (124,000)

Proceeds from the sale of investments 600,000 -

Purchases of land, buildings, furniture and equipment (4,245) (1,805)

Purchase of investments (173,837) (115,612)

Proceeds from disposal of property - 50

Net Cash From (for) Investing Activities 796,918 (241,367)

Cash Flows From (for) Financing Activities

Issuance of notes payable - demand 307 293

Payments on annuities payable (31,573) (30,384)

Net Cash for Financing Activities (31,266) (30,091)

Effect of Exchange Rates on Cash (62,044) 90,199

Net Increase (Decrease) in Cash and Cash Equivalents 1,314,599 (123,600)

Cash and Cash Equivalents, beginning of year 1,482,832 1,606,432

Cash and Cash Equivalents, end of year 2,797,431$ 1,482,832$



Notes to Combined Financial Statements

See accompanying independent accountant’s review report.

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1. Organization Christian Reformed World Missions of the United States of America (CRWM-US) and Christian Reformed World Missions of Canada (CRWM-CA) (separately referred to as Agencies; collectively referred to as the Organization) operate under the direction of the Synod of the Christian Reformed Church. The purpose the Organization is to direct and supervise mission programs and activities outside the United States and Canada. The Agencies administer certain programs and activities through Christian Reformed World Missions International (CRWM International), a joint venture ministry whose balances and activities are also included in these combined financial statements. The Organization’s principal operations are primarily in the following geographic areas: Africa Asia Latin America Europe Nigeria Bangladesh Dominican Republic Hungary Sierra Leone Cambodia Haiti Romania West Africa * Japan Mexico Russia Nepal Costa Rica Ukraine Philippine Islands Honduras France Nicaragua * Country names have been withheld for security reasons. In their respective countries, the Agencies are exempt from income taxes, and contributions to CRWM-US and CRWM-CA are deductible for federal tax purposes. 2. Summary of Significant Accounting Policies Combined Financial Statements The combined financial statements are expressed in United States dollars and are prepared in accordance with accounting principles generally accepted in the United States of America. All interagency balances, accounts and transactions have been eliminated. Net assets and changes therein are classified and reported as follows:

Unrestricted net assets – Net assets which are not subject to donor-imposed stipulations. Included in unrestricted net assets are net assets which have been designated for capital projects and for operating reserves.

Temporarily restricted net assets – Net assets subject to donor-imposed stipulations that may or will be met by actions of the Organization and/or the passage of time. Net assets are temporarily restricted primarily for specific missionary programs and international ministry projects.

Permanently restricted net assets – Net assets subject to donor-imposed stipulations that they be maintained permanently by the Organization. The donors of these assets have




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stipulated that the net assets be invested and that any income earned be used for general operations. A certain trust agreement also specifies that any changes in fair market value of its underlying assets remain permanently restricted.

Revenues, contributions and investment income are reported as follows:

Revenues are reported as increases in unrestricted net assets, unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments and other assets or liabilities are reported as increase or decrease in unrestricted net assets, unless their use is restricted by explicit donor stipulations. Expirations of temporary restrictions on net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as reclassifications between the applicable classes of net assets.

Contributions, including unconditional promises to give, are recognized as revenues in the period received. Conditional promises to give are not recognized until they become unconditional, that is, when the conditions on which they depend are substantially met. Contributions of assets other than cash are recorded at their estimated fair value. Denominations ministry shares are recommended gifts from churches based on active professing members age 18 and over. Legacies are gifts received through estates based on donor bequests.

Functional Currency The functional currency for foreign activities is the applicable local currency. The translation from the applicable foreign currency to United States dollars is performed for accounts of the combined statements of financial position using current exchange rates in effect at the combined statements of financial position date, and for revenue and expense accounts using an average exchange rate during the period. The gains or losses resulting from such translation are included as a separate component of net assets. Gains or losses resulting from foreign currency transactions were not material and are reflected in the respective expense category. Use of Estimates The preparation of the combined financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ from those estimates. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid debt instruments with original maturities of less than three months when purchased.




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Field Advances Field advances are the balances of operating cash held at ministry sites as a combination of overseas bank holdings, partner organization advances and petty cash funds. They are listed as a separate asset because of the limited capability to repatriate the funds for alternate use. Inventory Inventory consists primarily of items held for resale in connection with operations in Nigeria and is stated at the lower of first-in, first-out cost or market, as determined under the retail inventory method. Investments Investments are carried at fair value as determined by quoted market prices and other measurement inputs. See Notes 3 and 4 for additional disclosures on investments. Land, Buildings, Furniture and Equipment Land, buildings, furniture and equipment are carried at cost less accumulated depreciation. Deprecation is computed by the straight-line method over the estimated useful lives of the assets, which range from two to 40 years. Land, buildings and equipment acquired in connection with CRWM’s operations outside of the United States and Canada are expensed in the year of acquisition. Management is of the opinion that capitalization is not appropriate for the following reasons: (1) it is the intention within the objectives of CRWM to eventually convey the properties to the national churches or governments and/or (2) recovering any significant portion of these capital costs is uncertain because of restrictions on foreign ownership of property and exchange control regulations in many of the foreign fields. Generally, as a matter of policy, CRWM will not demand payment on long-term agreements from church-related organizations to which land, buildings and equipment are sold. Therefore, proceeds from the sale of these items are recorded on the cash basis as received. Termination and Shipping Allowances Termination and shipping allowances that will be paid to personnel working in foreign countries when they terminate their employment are recognized as earned. Investment Income Investment income (loss) consists of realized and unrealized gains and losses, interest and dividends, and change in the present value of annuities payable. Subsequent Events Management has evaluated subsequent events through November 1, 2012, the date the financial statements were available to be issued. Based on evaluation, there were no matters identified that had a significant impact on the financial statements as presented.




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3. Investments Prior to July 1, 2011, the Organization directed its investments through Christian Reformed Church in North America Foundation (Foundation). Starting July 1, 2011, the Organization directs investments through CRCNA Funds, LLC (CRCNA Funds). CRCNA Funds holds investments of the participating agencies of the Christian Reformed Church, which are administered and managed by JPMorgan. Participation agencies direct their investments into the balanced portfolio and/or the fixed-income portfolio, and are allocated their share of investment earnings and losses. Investment Risk The Organization invests in various securities including government securities, corporate bonds, equity funds, money market funds and other debt instruments. 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 the amounts reported in the combined statements of financial position. Investments are summarized as follows: June 30, 2012 2011 Investments Held by CRCNA Funds $ 3,548,096 $ - Investments Held by Foundation $ - $ 3,959,407 Other Investments Bond funds $ 148,042 $ 151,738 Equity funds 155,846 160,052 Other mutual funds 115,146 103,576 Money market funds 6,072 20,433 Total Other Investments $ 425,106 $ 435,799 Investments are carried at fair value. Fair value is determined by closing market prices at year- end. Unrealized appreciation and depreciation of investment held at fair value as of year-end is determined using the beginning of the year market value or purchase price, if acquired since that date. Purchase and sales of securities are recorded on a trade-date basis. Interest income is recorded on an accrual basis. Total investment gain of approximately $180,000 for the year ended June 30, 2012 represented investment and dividend income of approximately $138,000, decrease in the present value of annuities payable of approximately $19,000, unrealized gain on investments of approximately $4,000, and realized gain on investments of $57,000. Total investment gain of approximately $528,000 for the year ended June 30, 2011 represented investment and dividend income of approximately $137,000, decrease in the present value of annuities payable of approximately $23,000, and unrealized gain on investments of approximately $414,000.




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4. Fair Value Measurements In accordance with the FASB standard relating to fair value measurements, the Organization classifies its investments into Level 1, which refers to securities valued using quoted prices from active markets for identical assets; Level 2, which refers to securities not traded on an active market but for which observable market inputs are readily available; and Level 3, which refers to securities valued based on significant unobservable inputs. The valuation technique used by the Organization for its Level 2 investments is the market approach, which uses prices and other relevant information generated by market transactions involving identical or comparable assets. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables set forth by level within the fair value hierarchy a summary of the Organization’s investments measured at fair value on a recurring basis. June 30, 2012 Level 1 Level 2 Total Investments held by CRCNA Funds $ 2,873,285 $ 674,811 $ 3,548,096 Other investments Bond funds 148,042 - 148,042 Equity funds 155,846 - 155,846 Other mutual funds - 115,146 115,146 Money market funds 6,072 - 6,072 Total other investments 309,960 115,146 425,106 Investments, at fair value $ 3,183,245 $ 789,957 $ 3,973,202 June 30, 2011 Level 1 Level 2 Total Investments held by Foundation $ 3,055,915 $ 903,492 $ 3,959,407 Other investments Bond funds 151,738 - 151,738 Equity funds 160,052 - 160,052 Other mutual funds - 103,576 103,576 Money market funds 20,433 - 20,433 Total other investments 332,223 103,576 435,799 Investments, at fair value $ 3,388,138 $ 1,007,068 $ 4,395,206




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5. Endowments The Organization’s permanently restricted endowments were established to support general funding and daily operations of the Organization. Its endowment consists of only donor-restricted endowment funds. As required by accounting principles generally accepted in the United States of America, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions. Interpretation of Relevant Law The Organization’s Board has interpreted the Uniform Prudent Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of the interpretation, the Organization classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment funds that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Organization in a manner consistent with the standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, the Organization considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

(1) the duration and preservation of the fund. (2) the purpose of the Organization and the donor-restricted endowment fund. (3) general economic conditions. (4) the possible effect of inflation and deflation.

(5) the expected total return from income and the appreciation of investments. (6) other resources of the Organization. (7) the investment policies of the Organization.

Return Objective and Risk Parameters The Organization’s endowments are invested through CRCNA Funds and an additional balanced fund. CRCNA Funds portfolio is invested in both a balanced fund and a fixed-income fund. The investment objective of the balanced fund is a combination of fixed-income and equity securities to offer a higher return potential than the fixed-income fund alone. Investment into this style is assumed to have a relatively long (three to five years) time horizon. It is also assumed that cash flows should be minimal. The asset mix of the balanced fund ranges between equities and fixed-income, with a minimal amount included in cash equivalents. The investment objective of the fixed-income fund is a short bond style, which is intended to provide enhanced returns to a money market fund while retaining a low-risk profile. In order to control risk, a relatively short (approximately 1.5 to two years) duration approach is used. Investment into this style is assumed to be a secondary source of liquidity. The asset mix of the fixed-income fund is mainly fixed-




19

income with 10% or less invested in cash equivalents. The distributions of the restricted funds are based solely on the Organization’s needs of the funds within the stipulated donor restrictions. The Organization had the following changes in the permanently restricted endowments:

Temporarily

RestrictedPermanently

Restricted Beginning Balance, July 1, 2011 $ 126,873 $ 1,128,919 Gifts and offerings - 77,454 Investment income 55,402 - Decrease in market value - (10,693) Net assets released from restrictions (58,957) - Ending Balance, June 30, 2012 $ 123,318 $ 1,195,680 Strategies Employed for Achieving Objective To satisfy its long-term rate-of-return objectives, the Organization 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 Organization targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints. 6. Land, Buildings, Furniture and Equipment Land, buildings, furniture and equipment consist of the following: June 30, 2012 2011 Land and buildings $ 679,729 $ 692,548 Furniture and equipment 86,218 116,449 Total $ 765,947 $ 808,997 7. Annuities Payable Donors may transfer assets to the Organization in exchange for the right to receive a predetermined return during their lifetime (an annuity). A portion of the transfer is considered to be a charitable contribution for income tax purposes. Upon receipt of the transfer, the Organization records a liability for the annuity payable at the present value of future payments based on life expectancy and the midterm federal rate for U.S. Treasury Bills for the month the contract is written with the same maturity as the average life expectancy of the annuitants (9.8% to 4.7% at June 30, 2012). The difference between the liability recognized for the annuity and the amount of the transfer is recognized as unrestricted contribution income at the date of the gift unless the gift portion is restricted. Annuity payments are charge against the liability which, at the end of each fiscal year, is adjusted to the present value of future payments based on life




20

expectancy and the interest rate used at contract inception. The resulting adjustment is netted against investment income (loss) in the combined statements of activities. 8. Refundable Advances Refundable advances represent assets transferred to the Organization under revocable gift agreements wherein the Organization agrees to pay the donor an amount equal to a designated percentage rate. The donor has the right to revoke the gift at any time. If not previously called by the donor, upon the death of the donor, and in certain situations the donor’s survivor, the principal transfers to the Organization. The designated percentage rate is 3% per annum and is payable semi-annually. 9. Employee Retirement Plans The Organization contributes to the CRCNA’s Employee’s Savings Plan, a defined contribution retirement plan for the benefit of covered non-ordained employees (Non-ordained Plan), and to the Retirement Plan for Ministers of the Christian Reformed Church in the United States (U.S. Ordained Plan), a defined benefit retirement plan for ordained employees. Retirement plan contributions for ordained employees of Christian Reformed World Missions of Canada are made to the Retirement Fund for Ministers of the Christian Reformed Church in Canada (Canada Ordained Plan), a defined benefit retirement plan. Retirement plan contributions for non-ordained employees of Christian Reformed World Missions of Canada are made to an RRSP. The Organization’s obligation for the Non-ordained Plan is limited to a matching contribution of up to 4% of eligible wages, with employer discretionary contributions of up to 6% of eligible wages of qualified employees. For the Ordained plans, all organized churches are required to pay church assessments determined at an amount per professing member age 18 years and older or, if greater, the direct costs of their first or only pastor’s participation in the organized church, based on reported membership statistic. Retirement plan contribution expense for the Organization for the years ended June 30, 2012 and 2011 amounted to approximately $505,000 and $394,000, respectively. Separate information with respect to plan assets and accumulated plan benefits for the defined benefit plans is not available. However, for information purposes, the estimated actuarial present value of accumulated plan benefits and plan assets, assuming 8% interest rate for the U.S. Ordained Plan, as of the most recent valuation was $113,424,294. Net assets available for benefits of the U.S. Ordained Plan were $87,687,033 and $91,541,013 as of January 1, 2012 and January 1, 2011, respectively. The decrease in net assets available for benefits is due primarily to unrealized losses in pension assets invested during the year. The Pension Board of Trustees anticipates that the difference between estimated actuarial present value of accumulated plan benefits and net assets available for benefits at the most recent valuation date will be met through future pension investment gains and possible higher contributions to the Plans.




21

10. Transactions With Other Christian Reformed Church Entities During the years ended June 30, 2012 and 2011, the Organization purchased printed materials totaling approximately $186,000 and $217,000, respectively, from the Christian Reformed Church in North America (CRCNA) and incurred charges of approximately $502,000 and $513,000, respectively, for administrative support, printing and other services. The Organization also incurred charges during 2012 and 2011 of approximately $228,000 and $222,000, respectively, from the CRCNA for support charges related to the financial services function and approximately $141,000 and $162,000, respectively, of allocated building occupancy expenses. Amount receivable (payable) with other Christian Reformed Church entities and related parties included in interest and other receivables (accounts payable and accrued expenses) in the combined statements of financial position were as follows: June 30, 2012 2011 CRCNA $ (161,488) $ (88,917) Faith Alive Christian Resources 194 98 Christian Reformed World Relief Committee (1,179) (167) Back to God Ministries International 1,654 3,007 The Christian Reformed Board of Home Missions 350 215 Total $ (160,469) $ (85,764) The Organization manages its cash in conjunction with the CRCNA consolidated cash management system, which holds all funds in a single bank. As part of this process, the CRCNA may borrow funds of participating entities. As of June 30, 2012 and 2011, the CRCNA had borrowed $49,000 and $424,000, respectively, from the Organization. CRWM-US has authorized the use of its funds held in the Christian Reformed Church concentration cash account as collateral for borrowings of the CRCNA, up to a $2 million limit.

Supplementary Information

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23

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

Independent Accountant’s Review Report on Supplementary Information Our reviews of the basic financial statements included in the preceding section of this report were made for the purpose of expressing a conclusion that there are no material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles in the United States. The supplementary information presented in the following section of this report is presented only for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the inquiry and analytical procedures applied in the review of the basic financial statements. Based on our reviews, we did not become aware of any material modifications that should be made to the supplementary information.

November 1, 2012


Combining Summary of Financial Position Information – United States, International and Canada in United States Dollars, and Canada in Canadian Dollars

24

Canadian $

United

June 30, 2012 Combined States International Canada Canada

Assets

Cash and cash equivalents 2,797,431$ 686,851$ -$ 2,110,580$ 2,148,828$

Investments held by Christian Reformed Church in North America Foundation 3,548,096 3,548,096 - - -

Other investments 425,106 425,106 - - -

Field advances 534,659 - 534,659 - -

Receivables from missionaries 146 146 - - -

Due from the Christian Reformed Church in North America 49,000 49,000 - - -

Interest and other receivables 108,014 10,992 89,110 7,912 8,055

Inventory 19,571 - 19,571 - -

Prepaid expenses 533 533 - - -

Due from affiliate - 49,540 - (49,540) (50,438)

Land, buildings, furniture and equipment 765,947 752,783 - 13,164 13,403

Less: accumulated depreciation (284,147) (275,546) - (8,601) (8,757)

Total Assets 7,964,356$ 5,247,501$ 643,340$ 2,073,515$ 2,111,091$


Liabilities

Accounts payable and accrued expenses 1,216,254$ 953,890$ 148,396$ 113,968$ 116,033$

Annuities payable 172,245 172,245 - - -

Refundable advances 32,789 32,789 - - -

Accrued termination and shipping allowances 1,284,851 1,142,575 - 142,276 144,854

Total Liabilities 2,706,139 2,301,499 148,396 256,244 260,887

Net Assets 5,258,217 2,946,002 494,944 1,817,271 1,850,204

Total Liabilities and Net Assets 7,964,356$ 5,247,501$ 643,340$ 2,073,515$ 2,111,091$

United States $

See accompanying independent accountant’s review report on supplementary information.


Combining Summary of Financial Position Information – United States, International and Canada in United States Dollars, and Canada in Canadian Dollars

25

Canadian $

United

June 30, 2011 Combined States International Canada Canada

Assets

Cash and cash equivalents 1,482,832$ 345,304$ -$ 1,137,528$ 1,097,153$

Investments held by Christian Reformed Church in North America Foundation 3,959,407 3,959,407 - - -

Other investments 435,799 435,799 - - -

Field advances 710,582 - 710,582 - -

Receivables from missionaries 3,598 3,598 - - -

Due from the Christian Reformed Church in North America 424,000 424,000 - - -

Interest and other receivables 176,610 16,568 154,447 5,595 5,396

Inventory 11,264 - 11,264 - -

Prepaid expenses 10,174 10,174 - - -

Due from affiliate - (109,341) - 109,341 105,460

Land, buildings, furniture and equipment 808,997 794,914 - 14,083 13,583

Less: accumulated depreciation (308,747) (296,665) - (12,082) (11,654)

Total Assets 7,714,516$ 5,583,758$ 876,293$ 1,254,465$ 1,209,938$


Liabilities

Accounts payable and accrued expenses 878,738$ 619,731$ 176,853$ 82,154$ 79,238$

Payables to missionaries 790 - - 790 762

Annuities payable 184,905 184,905 - - -

Refundable advances 32,482 32,482 - - -

Other note payable 617,360 - 617,360 - -

Accrued termination and shipping allowances 1,418,175 1,222,960 - 195,215 188,286

Total Liabilities 3,132,450 2,060,078 794,213 278,159 268,286

Net Assets 4,582,066 3,523,680 82,080 976,306 941,652

Total Liabilities and Net Assets 7,714,516$ 5,583,758$ 876,293$ 1,254,465$ 1,209,938$

United States $



Combining Summary of Activities Information – United States, International and Canada in United States Dollars, and Canada in Canadian Dollars

26

Canadian $

United

Year ended June 30, 2012 Combined States International Canada Canada


Denominational ministry shares 4,946,070$ 3,346,461$ -$ 1,599,609$ 1,609,427$


Missionary support 5,079,685 4,200,972 - 878,713 884,106

General 2,486,039 1,690,571 - 795,468 800,351

Legacies 1,726,111 1,508,143 - 217,968 219,306

Investment income 179,744 168,762 - 10,982 11,049

Other field revenues 294,448 - 294,448 - -

Transfers - (3,484,737) 4,637,084 (1,152,347) (1,159,420)

Other 18,422 16,771 - 1,651 1,661

Total Revenues and Other Support 14,730,519 7,446,943 4,931,532 2,352,044 2,366,480

Expenses

Program services:

East Africa 375,912 106,711 260,774 8,427 8,479

West Africa 3,267,629 1,594,694 1,190,825 482,110 485,069

Asia 2,400,930 1,513,480 851,124 36,326 36,549

Latin America 4,022,193 2,149,006 1,747,038 126,149 126,923

Europe 565,955 294,953 170,344 100,658 101,276

Education & Global Impact 1,240,100 1,014,714 - 225,386 226,769

Total program services 11,872,719 6,673,558 4,220,105 979,056 985,065

Support services:

Management and general 1,035,185 477,793 298,563 258,829 260,418

Resource development 1,084,420 873,270 - 211,150 212,446

Total support services 2,119,605 1,351,063 298,563 469,979 472,864

Total Expenses 13,992,324 8,024,621 4,518,668 1,449,035 1,457,929

Changes in Net Assets 738,195$ (577,678)$ 412,864$ 903,009$ 908,551$

United States $



Combining Summary of Activities Information – United States, International and Canada in United States Dollars, and Canada in Canadian Dollars

27

Canadian $

United

Year ended June 30, 2011 Combined States International Canada Canada


Denominational ministry shares 4,981,972$ 3,306,056$ -$ 1,675,916$ 1,695,413$


Missionary support 4,690,750 3,936,990 - 753,760 762,529

General 2,215,025 1,591,556 - 623,469 630,722

Legacies 653,266 609,871 - 43,395 43,900

Investment income 528,227 517,974 - 10,253 10,373

Other field revenues 309,498 - 309,498 - -

Transfers - (2,018,932) 3,672,345 (1,653,413) (1,672,649)

Other 48,108 44,258 1,164 2,686 2,717

Total Revenues and Other Support 13,426,846 7,987,773 3,983,007 1,456,066 1,473,005

Expenses

Program services:

East Africa 375,035 89,243 260,494 25,298 25,592

West Africa 3,227,710 1,547,883 1,180,444 499,383 505,193

Asia 2,213,796 1,414,606 765,740 33,450 33,839

Latin America 3,968,682 2,206,623 1,631,320 130,739 132,260

Europe 398,443 168,425 128,214 101,804 102,988

Education & Global Impact 1,154,482 994,457 - 160,025 161,887

Total program services 11,338,148 6,421,237 3,966,212 950,699 961,759

Support services:

Management and general 879,114 459,440 287,661 132,013 133,548

Resource development 1,196,989 856,021 - 340,968 344,935

Total support services 2,076,103 1,315,461 287,661 472,981 478,483

Total Expenses 13,414,251 7,736,698 4,253,873 1,423,680 1,440,242

Changes in Net Assets 12,595$ 251,075$ (270,866)$ 32,386$ 32,763$

United States $


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