Celebrating 25 Years of Impact.

25 1987-2012 Annual Report Special Edition 25th Anniversary Supplement

OUR VISION

CI

handinhand

We imagine a healthy, prosperous world in which societies are forever committed to caring for and valuing nature, our global biodiversity, for the long-term benefit of people and all life on Earth.

OUR MISSION

Building upon a strong foundation of science, partnership and field demonstration, CI empowers societies to responsibly and sustainably care for nature, our global biodiversity, for the well-being of humanity.

CI | 2011 ANNUAL REPORT | 1

04 06

Leadership Message

contents

10

Board of Directors

2 | 2011 ANNUAL REPORT | CI

Financials

12

Chairman’s Council

14

Senior Leadership

CI | 2011 ANNUAL REPORT | 3

LEADERSHIP MESSAGE This year, Conservation International (CI) is celebrating 25 years of protecting nature for the well-being of humanity. And as we reflect now on the many conservation milestones and victories we have realized, it is gratifying to see just how far CI has come—and humbling to consider just how far we have yet to go. But as we stand on the verge of our next quarter-century, we couldn’t be more encouraged by the progress we have made—and the difference we are making.

2012handinhand

When CI was founded on a snowy night at Washington, D.C.’s historic Tabard Inn in 1987, our success was anything but assured. The small band of dedicated conservationists that gathered that evening had little more than a shared belief that the time for a new approach had come—that science, economics and local communities all have vital roles to play in international conservation. 4 | 2011 ANNUAL REPORT | CI

In our first year, we broke new ground by signing the first-ever debt-for-nature swap agreement with the government of Bolivia, which was—just the first of many solutions we would pioneer in the years to come. Since then, we have continued to innovate and scale up our efforts at a rapid pace. And through it all, we have stayed true to the ideals we’ve held since the beginning—our foundation of science, partnership and field demonstration remains as strong as ever. And while our original mission was to protect biodiversity around the world, the seeds of our renewed mission— protecting that biodiversity for the well-being of humanity— were there all along. They were present in our early efforts and enterprises that were grounded by a simple understanding: In order for conservation to succeed, it must reconcile both the needs of the planet and its people, and it must secure both life and livelihoods. Today, milestone by milestone, we are witnessing this vision coming to fruition in ways and in proportions we once only could have imagined. We see it in our work on the Pacific Oceanscape, the most ambitious marine conservation in history, where the leaders of 16 island nations are bringing cooperative management and protection to 10 percent of the planet’s ocean surface—an area larger than the surface of the moon. These efforts aim to increase fish stocks, empower community conservation and promote effective adaptation to the impacts of climate change. We see it on the African continent, where our pilot project with the Bill & Melinda Gates Foundation has given rise to a renewed commitment and funding to create Vital Signs—a robust monitoring network that will inform smart agricultural investment at a time of great intensification by measuring and integrating essential ecosystem services into decision-making. Through Vital Signs, a dynamic

network of scientists and policymakers will benefit from critical data as they figure out how to produce enough food to feed the world’s growing population without damaging precious natural resources. We see it on the world stage in forums like the Summit for Sustainability in Africa—convened by His Excellency Ian Khama, president of Botswana, in cooperation with CI board members Rob Walton and Laurene Powell Jobs— where the leaders of 10 resource-rich nations committed to taking nature’s full measure and worth into their national accounting. Recognizing that healthy ecosystems underscore sustainable development, these governments are pledging to follow an economic development path that considers the value of nature and its services. And, finally, we see our vision becoming reality with the creation of the first trust fund to protect the Amazonian rainforest territories of Brazil’s Kayapó indigenous peoples. An initial donation of $8 million from CI’s Global Conservation Fund provided by the Gordon and Betty Moore Foundation and Brazil’s National Economic and Social Development Bank with support from the Amazon Fund will conserve 3 percent of the Amazon while offering sustainable economic activities for 7,000 people. More than ever, CI’s mantra—that safeguarding our future lies in safeguarding our planet—is resonating with community leaders, captains of industry and heads of state; these leaders increasingly understand that it is in their enlightened self-interest to properly value and protect the gifts of nature that sustain us. So we embark on the next quarter-century with a renewed sense of hope and, with your continued support, confirmation that we are charting a path toward a brighter future for the planet and the seven billion of us—and counting—who call it home. CI | 2011 ANNUAL REPORT | 5

Since our inception in 1987, CI has matured into a $140 million organization with more than 800 employees in offices spanning 28 countries across the globe. Funding to protect our precious, life-giving planet is scarce, and today we spend every conservation dollar as carefully and deliberately as we did when we first began on a shoestring budget of less than $2 million. CI’s funding model is rather unique within the nonprofit community. We are not a membership organization. In contrast to other organizations of our size, we are supported by a comparatively small group of dedicated, highly engaged donors who commit themselves to supporting high-impact, multi-year programs. This model allows us to minimize our fundraising costs while focusing our dollars and efforts on maximizing programmatic delivery. Our statement of activities, presented on page 9, outlines our revenue sources and illustrates how we invested these resources in fiscal year 2011. 6 | 2011 ANNUAL REPORT | CI

Donors + Revenue

from the Walton Family Foundation to support our Bird’s Head and Eastern Tropical Pacific Seascapes programs.

The mission CI has undertaken is complex, and the solutions that we offer require ongoing commitment and perseverance.

We also reported $1.9 million in grant cancellations and deobligations in fiscal year 2011, largely due to the fact that several projects were completed for less than the amount of the grant awarded to us. This was a big change from fiscal year 2010 when the lingering effects of the global economic downturn resulted in the early termination of several large, multi-year grants.

CI’s donors are our partners in the truest sense of the word. We have been fortunate to receive transformative grants from donors such as the Gordon and Betty Moore Foundation; the Walton Family Foundation; the French, German and Norwegian governments; Disney; and Starbucks Coffee Company. Our donors not only provide critical financial support, but also engage with us in our work and develop their own long-term environmental strategies, thus greatly leveraging our mutual impact. In fiscal year 2011, CI received funding from approximately 4,700 individual, foundation, corporate, government and multilateral donors. For an organization of our size, this is a relatively small, but highly committed and engaged donor base. Although most of our funding comes in the form of large, multi-year restricted awards, unrestricted funding provides us with the critical flexibility to respond to urgent needs and opportunities. Unrestricted funding also allows us to support new programs for which funding has not yet been secured. CI’s long-term sustainability depends on raising an appropriate balance of both restricted and unrestricted funding. In fiscal year 2011, we received several generous grants that allowed us to realize significant growth in most revenue categories, including $16 million from the Walton Family Foundation and USAID to launch our Sustainable Landscapes Program. This program will encourage low-carbon, private sector investments designed to reduce or eliminate deforestation in Indonesia through innovative, public-private partnerships. Additionally, we received more than $13 million from the German Ministry of the Environment, Disney, The Norwegian Agency for Development Cooperation and JPMorgan Chase Foundation for forest conservation in Africa, Asia and South America. Other noteworthy grants included $30 million

Expenditures We are committed to maintaining the highest standards of stewardship over the funds entrusted to us by our donors. In fiscal year 2011, 81 percent of every dollar spent directly supported CI’s programs. Management and operations accounted for 11 percent of total spending, and development expenditures accounted for 8 percent of total spending. Our goal is to ensure that CI has robust systems and infrastructure in place to effectively manage and support a complex global operation. We also aim to carefully manage our costs to maximize dollars available for programmatic use. CI consistently invests the largest portion of our resources in our people and partners—66 percent in fiscal year 2011. Specifically, 47 percent of our budget went to support our staff, who are recognized experts in their respective fields and countries. Grants to partners comprised 19 percent of our expenditures. Grantmaking represents a cornerstone of CI’s programmatic delivery. At CI, we believe that the greatest programmatic impacts are achieved by supporting and building the capacity of local organizations and peoples in managing their own natural resources. In fiscal year 2011, several programs implemented during previous years came to completion. Consequently, we awarded fewer grants to partners in fiscal year 2011 than in fiscal year 2010. This lower rate of grantmaking was the primary driver in reducing our expenses by $17 million for this period.

Summary Those who read CI’s financial statements often ask us why our revenue fluctuates—sometimes dramatically—between years. For example, our revenues rose by almost $70 million, from $77.8 million in fiscal year 2010 to $147 million in fiscal year 2011. The funding CI receives in form of large, multi-year gifts must be reported as revenue in the year we receive them. As a result, our reported revenue can fluctuate significantly while our expenses remain more consistent from year to year. Thus in years that we have received significant new grants that will be spent during subsequent years, our financial statements may reflect large surpluses. In later years when these programs are implemented, our statements may reflect deficits. Net assets represent the cumulative amount of revenue that we have raised in excess of our expenditures since our inception. Thus, our net asset balance is what we have available to invest in conservation in the current and future years and as such is an important indicator of CI’s financial health and sustainability. Based on the changes in our net asset balance over the years, it is clear that CI has enjoyed consistent growth. CI is indeed fortunate to stand on very sound financial footing with total net assets of $259 million at the close of fiscal year 2011.

Net Assets In millions of US dollars

FINANCIALS

$350 $300 $250 $200 $150

Net Assets

$100 $50 $FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 CI | 2011 ANNUAL REPORT 7 CI | 2008 ANNUAL REPORT | |29

Statement of Activities*

Revenue and Expense Summary

2010

2011

UNRESTRICTED

Governments, NGOs and Mutilaterals 20%

Ecosystem Finance and Markets 18%

Individuals 11%

Management and Operations 11%

Science and Knowledge 9%

Corporations 10%

EXPENSES

REVENUE $147.2 Million in FY 2011

$121.6 Million in FY 2011

Investments 4%

Development 8%

Other Income 1% Center for Conservation and Government 4%

Revenue Grants and contributions Foundations Individuals Corporations Non-U.S. Government U.S. Government NGO/Multilaterals Cancellations and deobligations Investment income Licensing agreements, product sales and other income Net assets released from donor restrictions



Total Revenue Expenses Program services Field Programs Ecosystem Finance + Markets Science + Knowledge Center for Conservation + Government Global Marine Communications Global Initiatives Total program services Supporting services Management and Operations Development Total supporting services

Field Programs 40%

Global Marine 4% Communications 4%

Foundations 54%

Global Initiatives 2%

Total Expenses Changes in net assets before non-operating activity Nonoperating activity Gain (loss) on foreign currency translation

$6,537 6,624 2,350 12 2,040

TEMPORARILY RESTRICTED



$72,579 9,878 12,621 13,367 10,203 5,748 (1,941) 3,699

PERMANENTLY RESTRICTED



$51 3 -

TOTAL



TOTAL

$79,167 16,505 14,971 13,367 10,203 5,760 (1,941) 5,739



$25,475 21,803 17,894 9,094 4,205 3,775 (11,559) 5,261

3,471

(83)

-

3,388

1,868

102,062

(102,062)

-

-

-

123,096

24,009

54

147,159

77,816

48,526 21,136 11,371 5,105 5,011 4,611 2,633 98,393

-

-

48,526 21,136 11,371 5,105 5,011 4,611 2,633 98,393

58,012 29,003 11,442 3,924 4,598 5,907 1,481 114,367

-

13,232 9,928 23,160

14,856 9,600 24,456



13,232 9,928 23,160 121,553 1,543





24,009

-

2,881

Changes in Net Assets Net assets at beginning of year Changes in net assets

$1 ,543

$26,890

17,656 1,543

199,491 26,890

Net Assets at End of Year

$19,199

$226,381



54



121,553 25,606



138,823 (61,007)

2,881

(3,889)

$54

$28,487

($64,896)

13,201 54

230,348 28,487

295,244 (64,896)

$13,255

$258,835

$230,348

-







* For the Fiscal Years Ending June 30, 2011 and 2010, in Thousands 8 | 2011 ANNUAL REPORT | CI

CI | 2011 ANNUAL REPORT | 9

Board of Directors*

Wes Bush

Chairman of the Board and Chief Executive Officer

Paula Hannaway Crown

Peter A. Seligmann Conservation International Arlington, Virginia

Chairman of the Executive Committee Rob Walton

Chairman of the Board Wal-Mart Stores, Inc. Bentonville, Arkansas

board

Vice Chair Harrison Ford

Actor Los Angeles, California

Jared Diamond, Ph.D.

Professor, Geography and Physiology UCLA Los Angeles, California

André Esteves

CEO Banco BTG Pactual S/A São Paulo, Brazil

Mark L. Feldman

President and Chief Executive Officer L & L Manufacturing Company Los Angeles, California

Robert J. Fisher

Board Members Roger Altman

Ann Friedman

Henry H. Arnhold

Chairman of the Board Arnhold & S. Bleichroeder Holdings, Inc New York, New York

Dr. Alex Balkanski General Partner Benchmark Capital Woodside, California

Skip Brittenham C I | 2 0 0 8 A N N U A L R E P O RT | 5 1

Principal Henry Crown and Company Chicago, Illinois

Director Gap, Inc. San Francisco, California

Founder and Chairman Evercore Partners New York, New York

10 | 2011 ANNUAL REPORT | CI

Chairman, Chief Executive Officer and President Northrop Grumman Corporation Falls Church, Virginia

Senior Partner Ziffren Brittenham LLP Los Angeles, California

Teacher Bethesda, Maryland

Dr. Victor Fung Chairman Fung Global Institute Hong Kong

Jeff Gale

Gale Force Studios Las Vegas, Nevada

Richard Haass, Ph.D. President Council on Foreign Relations New York, New York

Laurene Powell Jobs

Pavan Sukhdev

Hon. Alexander Karsner

John Swift

Founder and Board Chair Emerson Collective Palo Alto, California

CEO and Founder Manifest Energy, LLC Washington, DC

President S. K. Ian Khama

CEO, GIST Advisory Study Leader, TEEB Gurgaon, Haryana, India

Conservationist Cayucos, California

Dr. Enki Tan

Republic of Botswana Gaborone, Botswana

Executive Chairman GITI Tire Co. Ltd. Singapore

Heidi Miller

Victoria Tauli-Corpuz

President of International (retired) JPMorgan Chase New York, New York

Kris Moore

Conservationist Los Altos Hills, California

Paul Polman

Chief Executive Unilever London, United Kingdom

Stewart A. Resnick Chairman of the Board Roll International Corporation Los Angeles, California

Story Clark Resor Principal Conservation Consulting Wilson, Wyoming

Orin Smith

Executive Director Tebtebba (Indigenous Peoples’ International Centre for Policy Research and Education) Baguio City, Philippines

Ray R. Thurston Retired CEO UPS Logistics Group Jackson, Wyoming

President Anote Tong Republic of Kiribati Bairiki, Tarawa

Byron Trott

Chairman and CEO BDT Capital Partners, LLC Chicago, Illinois

William Wrigley, Jr. Wrigley Management Inc. Chicago, Illinois *As of December 2012

Chief Executive Officer (retired) Starbucks Coffee Company Seattle, Washington

Amb. Thomas F. Stephenson Partner Sequoia Capital Menlo Park, California

CI | 2011 ANNUAL REPORT | 11

Chairman’s Council* Chairperson Maureen Schafer Las Vegas, NV

Elizabeth Fisher San Francisco, CA

Nancy Frisch Portland, OR

Members Catherine Adler New York, NY

Patrice Auld Seattle, WA

Sybilla Balkanski Woodside, CA

Kyung Choi Bordes and Peter Bordes

council

New York, NY

Carolyn Brody New York, NY

Thomas Byers Palo Alto, CA

J. Rodney & Nancy Chiamulon Pacific Palisades, CA

Suzie Coleman Healdsburg, CA

Ann Colley New York, NY

Alan Dynner Boston, MA

David Fenton

Jane Gale Las Vegas, NV

Mary C. Gallo Modesto, CA

Cori Glaser Seattle, WA

Howard Gould New York, NY

Renee Harbers New York, NY

Jane Hartley New York, NY

James N. Hauslein Hobe Sound, FL

Ann-Eve Hazen Tiburon, CA

Sydney McNiff Johnson Washington, DC

James Jordan New York, NY

Jeffrey Lesk

Rosemarie Rotella

Finn Longinotto

Kim Samuel-Johnson

Thomas E. Lovejoy

Pablo Sanchez Navarro

George Meyer and Maria Semple

Jessica and Richard Sneider

Washington, DC

Washington, DC

McLean, VA

Seattle, WA

Cristina Mittermeier

Nanoose Bay, British Columbia, Canada

Eddy Moretti New York, NY

Claire Ngo Singapore

Fabian and Nina Oberfeld Los Angeles, CA

Trina Overlock Greenwich, CT

Christopher Redlich Hillsborough, CA

Toronto, Canada

Mexico City, Mexico

Los Angeles, CA

Wm. Laney Thornton San Francisco, CA

Mike Velings

Utrecht, The Netherlands

Katie Vogelheim Tiburon, CA

Bradford Wurtz Portola Valley, CA

Gillian Wynn Santa Monica, CA

Darlene Ziebell Hoffman Estates, IL *As of December 2012

Sarah Johnson Redlich Hillsborough, CA

Tyler Kelley

Anders Rhodin and Carol Conroy

Los Angeles, CA

Lunenburg, MA

Frans Lanting

Nancy Morgan Ritter

Santa Cruz, CA

Kirkland, WA

Los Angeles, CA

New York, NY 12 | 2011 ANNUAL REPORT | CI

C I | 2 0 0 8 A N N U A L R E P O RT | 5 1

CI | 2011 ANNUAL REPORT | 13

Senior Leadership* Chairperson’s Office Chairman of the Board and Chief Executive Officer

Vic Arrington

Niels Crone Chief Operating Officer

General Counsel’s Office Amelia Smith

Executive Vice President Senior Vice President, Center for Environmental Leadership in Business

John De Wet Vice President, Finance and Operations

Patricia Zurita Vice President, Critical Ecosystem Partnership Fund

Senior Vice President and General Counsel

Center for Environment + Peace

The Gordon + Betty Moore Center for Ecosystem Science + Economics

Martha Stein-Sochas

Greg Stone, Ph.D. Executive Vice President

Sandy Andelman, Ph.D.

Senior Vice President

Frederick Boltz, Ph.D.

Marketing + Branding Heather Luca Acting Managing Director Development

Development Cynthia McKee Senior Vice President

Kraig Butrum Vice President, Major Gifts

Andrew Wilson Vice President, Foundation Relations

Field Programs José Maria Cardoso da Silva, Ph.D. Executive Vice President

Daniela Raik, Ph.D. Vice President, Field Program Management

Yasushi Hibi Vice President, Asia Policy and Managing Director, Japan

Africa + Madagascar Field Division

Senior Vice President

Celia Harvey, Ph.D.

Lilian Spijkerman

Benoit Kisuki

Joy Gaddy

Jean-Philippe Palasi

Senior Vice President

Scott Mills Vice President, Global Information Technology

Finance Barbara DiPietro Chief Financial Officer

Global Marine Greg Stone, Ph.D. Executive Vice President

Director, European Policy, Belgium

David Singh, Ph.D. Executive Director, Guyana

Tatiana Ramos Executive Director, Mexico

Luis Espinel Executive Director, Peru

Annette Tjonsiefat Executive Director, Suriname

Lisa Famolare Vice President, Strategic Projects, Guyana and Suriname

Asia-Pacific Field Division David Emmett Seng Bunra William Liao

Jessica Donovan

Vice President, Social Policy and Strategic Engagement

Executive Director, Ecuador

Country Director, Cambodia

Vice President and Senior Advisor, Global Policy

Global Operations

Luis Suarez

Managing Director, Africa and Madagascar Field Division and Vice President, Madagascar

Will Turner, Ph.D.

Kristen Walker-Painemilla

Executive Director, Colombia

Léon Rajaobelina

Carlos Manuel Rodriguez

Vice President, Global Public Partnerships

Fabio Arjona

Senior Vice President

Senior Vice President, International Policy

Senior Vice President

Vice President, Global Change and Ecosystem Services

C I | 2 0 0 8 A N N U A L R E P O RT | 5 1

Ecosystem Finance + Markets

Peter A. Seligmann

President

14 | 2011 ANNUAL REPORT | CI

Senior Vice President

Jennifer Morris

Russell A. Mittermeier, Ph.D.

staff

Sebastian Troeng, Ph.D.

Country Director, Liberia Country Director, Democratic Republic of Congo

Sarah Frazee Director and CEO, Conservation South Africa

Americas Field Division Fabio Scarano, Ph.D.

Vice President, China

Susana Waqainabete-Tuiese Country Director, Fiji

Ketut Sarjana Putra Executive Director, Indonesia

Jean-Christophe Lefeuvre Program Director, New Caledonia

Sue Taei Senior Director, Pacific Islands Oceanscape

Oliver Coroza

U.S. Government Policy

Senior Vice President

Jill Sigal

Vice President

Regional Director, Eastern Tropical Pacific Seascape

Enrique Nunez

News + Publicity

Eduardo Forno

*As of December 2012

Kim McCabe Vice President

Scott Henderson

Terrestrial Program, Philippines Marine Program, Philippines

Executive Director, Bolivia

André Loubet Guimaraes, Ph.D. Executive Director, Brazil CI | 2011 ANNUAL REPORT | 15

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CI’s Annual Report and Annual Report Supplement are published for supporters of Conservation International. A U.S.-based, international organization, CI is a nonprofit, tax-exempt corporation under Section 501(c)(3) of the Internal Revenue Code. All contributions are tax deductible to the full extent of the law. © 2011 Conservation International 16 | 2011 ANNUAL REPORT | CI

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