RANDALL S ISLAND SPORTS FOUNDATION, INC. (A Non-Profit Organization) Financial Statements. December 31, 2010 With Comparative Totals for 2009

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1 Financial Statements December 31, 2010 With Comparative Totals for 2009

2 Independent Auditors Report To the Board of Trustees Randall s Island Sports Foundation, Inc. New York, New York We have audited the accompanying statement of financial position of Randall s Island Sports Foundation, Inc. as of December 31, 2010, and the related st atements of activities, functional expenses by natural classification, and cash flows for t he year then ended. These financial statements are the responsibility of the Foundation s management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year s summarized comparative information has been derived from the Foundation s 2009 financial statements and, in our report dated June 3, 2010, we expressed an unqualified opinion on those financial statements. We conducted our audit in accordance with auditing st andards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of mate rial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and discl osures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Randall s Island Sports Foundati on, Inc., as of December 31, 2010, and its changes in net assets, and cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. New York, NY June 6, 2011

3 Page 2 Statement of Financial Position December 31, 2010 With Comparative Totals for ASSETS Cash and cash equivalents $ 3,525,655 $ 3,418,861 Prepaid expenses and other assets 36, ,170 Prepaid expenses - City of New York/Parks & Recreation 203, ,363 Contributions and license revenue receivable 869, ,583 Total Assets $ 4,634,688 $ 4,919,977 LIABILITIES Accounts payable and accrued expenses $ 175,297 $ 219,742 Accounts payable - Randall's Island Fields Group, LLC 400, ,000 Total Liabilities 575, ,742 NET ASSETS Unrestricted 3,928,141 4,300,235 Temporarily restricted 131,250 - Total Net Assets 4,059,391 4,300,235 Total Liabilities and Net Assets $ 4,634,688 $ 4,919,977 See accompanying notes to the financial statements.

4 Page 3 Statement of Activities Year Ended December 31, 2010 With Comparative Totals for REVENUES, INVESTMENT INCOME AND OTHER SUPPORT Unrestricted Temporarily Restricted Total Unrestricted Total EXPENSES Special events revenue $ 102,660 $ - $ 102,660 $ 47,185 Less: cost of direct benefits to donors (118,429) (118,429) (224,683) Special events, net (15,769) - (15,769) (177,498) Capital projects Pledges and contributions 1,113,246-1,113,246 1,036,785 General support Grants and contributions 1,226, ,250 1,357, ,359 Fundraising events 813, , ,575 In-kind support 115, , ,115 License revenue (Section 7) 3,437,402-3,437,402 2,796,980 Investment income 15,167-15,167 22,929 Total Revenues, Investment Income and Other Support 6,705, ,250 6,837,239 5,086,245 Program services Icahn stadium, sport field, and tennis center development 2,152,157-2,152,157 1,359,987 Maintenance and improvement of parkland 3,483,223-3,483,223 2,074,831 Youth and education programs 461, , ,462 Management and general 544, , ,580 Fundraising 436, , ,721 Total Expenses 7,078,083-7,078,083 4,756,581 Change in Net Assets (372,094) 131,250 (240,844) 329,664 Net Assets at Beginning of Year 4,300,235-4,300,235 3,970,571 Net Assets at End of Year $ 3,928,141 $ 131,250 $ 4,059,391 $ 4,300,235 See accompanying notes to the financial statements.

5 Page 4 Statement of Functional Expenses Year Ended December 31, 2010 With Comparative Totals for 2009 Year ended December 31, 2010 Program Services Supporting Services Icahn Stadium Maintenance Total Year Sport Field, and Youth and Total Management Program and ended and Tennis Center Improvement Education Program and Fund Supporting December 31, Development of Parkland Programs Services General Raising Services 2009 Salaries and payroll taxes $ 116,546 $ 1,417,504 $ 310,438 $ 1,844,488 $ 225,196 $ 180,356 $ 2,250,040 $ 1,837,030 Employee benefits 8, ,807 22, ,076 16,492 13, , ,604 Salaries and fringe - ball field crew - 431, , , ,147 Contracted services and professional fees 1,455, ,344 3,243 1,687,968 30,816 12,778 1,731,562 1,098,704 Management, general and operating expenses 29,227 43,888 4,142 77, , , ,158 Park maintenance, supplies and equipment 542,468 1,256,402-1,798, ,798, ,098 Fundraising and related expenses , , ,077 RIK program expenses , , , ,383 Marketing and communications - 1,000-1,000 19,138-20,138 13,380 Total $ 2,152,157 $ 3,483,223 $ 461,865 $ 6,097,245 $ 544,349 $ 436,489 $ 7,078,083 $ 4,756,581 See accompanying notes to the financial statements.

6 Page 5 Statement of Cash Flows Year Ended December 31, 2010 With Comparative Totals for OPERATING ACTIVITIES Change in net assets $ (240,844) $ 329,664 Adjustments to reconcile change in net assets to net cash provided by operating activities: Increase (decrease) in cash flows due to change in operating assets and liabilities: Prepaid expenses 742,404 (747,245) Prepaid expenses - City of New York/Parks & Recreation 30,253 18,780 Contributions receivable (380,574) 346,537 Accounts payable and accrued expenses (44,445) (306,069) Accounts payable - Randall's Island Fields Group, LLC - 400,000 License revenue (Section 7) advance - (140,628) Net Cash Provided (Used) by Operating Activities 106,794 (98,961) Increase (Decrease) in Cash and Cash Equivalents 106,794 (98,961) Cash and Cash Equivalents at Beginning of Year 3,418,861 3,517,822 Cash and Cash Equivalents at End of Year $ 3,525,655 $ 3,418,861 See accompanying notes to the financial statements.

7 Page 6 Notes to Financial Statements NOTE 1: ORGANIZATION The Randall s Island Sports Fo undation, Inc. (the Foundation ) is a non-profit public/private partnership with the City of New York/Parks & Recreation ( Parks Department ). The Foundation s mission is to develop Randall s Island into an accessible, well-organized and self-sustaining sports and recreation center with f acilities and community-linked programs geared largely toward the children of New York City. The Foundation was founded in 1992 as part of the City Parks Fo undation and incorporated on January 24, 1994, u nder Section 1411 of t he Not-for-Profit Corpo ration Law of the State of New York. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Contributions Cash contributions and unconditional promises to give are re corded as in come when received. They are re corded as u nrestricted, temporarily restricted, or pe rmanently restricted support, depending on th e existence and/or nature of any dono r restrictions. Temporarily restricted net assets are reclassified to unre stricted net assets upo n satisfaction of the time or purpose restrictions. Temporarily restricted contributions are recorded as unrestricted support when donor-imposed restrictions expire or are satisfied in the same reporting period for which they were received. The Foundation had no permanently restricted net assets as of December 31, 2010 and 2009, respectively. Promises to Give Unconditional promises to give are re cognized as contribution revenue in th e period received and as assets, decreases of liabilities, or expenses depending on the form of the benefits received. Promises to give are recorded at net reali zable value if expected to be collected in one year and at fair value if expected to be collected in more than one year. Co nditional promises to give are recognized when the co nditions on which they depend are substantially met. Cash and Cash Equivalents For purposes of the state ments of fin ancial position and cash flows, the Foundation considers all unre stricted, liquid investments with an initial maturity of three months o r less to be cash equivalents. Concentration of Credit Risk The Foundation maintains its cash balances at one financial institution. At December 31, 2009 accounts at the institution are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. Certain a dditional amounts are FDIC insu red under the Transaction Account Guarantee Program. As of December 31, 2010 and 2009, the Foundation s uninsured bank balances totaled $3,489,053 and $3,145,217, respectively, approximately $1,000,000 of these uninsured balances are held in U.S. Treasuries.

8 Page 7 Notes to Financial Statements NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Leasehold Improvements and Computer Equipment Leasehold improvements and computer equipment are stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful life of each asset. Use of Estimates The preparation of finan cial statements in accordance with accou nting principles generally accepted in th e United States of Ame rica requires management to use estimates and assumptions in p reparing financial statements. Those esti mates and assumptions affect the reporte d amounts of assets and lia bilities, the di sclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results may ultimately differ from estimates. Comparative Financial Information The financial statements include certain prior-year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of Ameri ca. Accordingl y, such information should be read in conjunction with the Foundation s financial statements for the year ended December 31, 2009, from which the summarized information was derived. Certain reclassifications have been made to the financial statement presentation to corresp ond to th e current year's presentation. Net assets and changes in net assets are unchanged due to these reclassifications. Functional Allocation of Expenses The costs of providing the program services and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated in an approximate manner among program, management and general and fund raising. Income Tax Status The Foundation is exempt from in come taxes under Section 501(c)(3) of the Internal Revenue Code. Effective January 1, 2009, the organization adopted the provisions of FASB Interpretation No. 48 ( FIN 48 ), Accounting for Uncertainties in Income Taxes an interpretation of FASB Statement No. 109, now incorporated in ASC 740, which provides standards for establishing and classifying any tax provisions for uncertain tax positions. The adoption of FIN 48 did not have an effect on the Foundation s financial position as of January 1, 2009 or the Foundation s results of operations and cash flows for the year ended December 31, The Foundation is no long er subject to federal o r state and local in come tax examinations by tax authorities for years before 2007.

9 Page 8 Notes to Financial Statements NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) In-Kind Contributions and Contributed Services In-kind contributions are reflected as contributions at their fair value at date of donation and are reported as unrestricted support unless explicit donor stipulations specify how donated assets must be used. The Foundation recognizes the fair v alues of contributed services received if su ch services create or enh ance nonfinancial assets, o r require specialized skills that are provided by individuals possessing those skills and would typically need to be purchased if not contributed. Subsequent Events Management has evaluated, for potential recognition and disclosure, events subsequent to the date of the statement of financial position through June 6, 2011, the date the financial statements were available to be issued (see Note 6). NOTE 3: TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets co nsist of cash contributions restricted by d onors for specific program services. As of December 31, 2010, temporarily restricted net assets of $131,250 are available for public programs in NOTE 4: LICENSE REVENUES (SECTION 7) Effective December 31, 2001, the Foundation entered into a li cense agreement with the Parks Department. Section 7 of the license agreement provides for the Foun dation to receive revenues from park events, or services it provides, which are u sed to offset expenses incurred by th e Foundation for th e operations of Randall's Island Park. Operations include maintenance and improvement of Park La nd as well a s Youth and Education programs. From December 31, 2001 throu gh December 31, 2010, the Foundation has incurred expenses for the operations of Randall s Island Park in excess of revenues received in accordance with Section 7 of the license agreement. NOTE 5: PREPAID EXPENSES - CITY OF NEW YORK/PARKS & RECREATION The Foundation has agreed to p rovide annual payments of $ 420,000 to the Parks Department in con sideration of Parks Dep artment staff position s at Rand all s Island. These payments entitle the Foundation to t he use of Parks Department personnel and services during the Parks Department fiscal year. During the years ended December 31, 2010 and 2009, the expenditures relating to these annual payments are included in the Statement of Functional expenses as Salaries and payroll taxes, Employee benefits, and Salaries and fringe ball field crew, Management, general and operating expenses, and Park maintenance, supplies and equipment. Prepaid expenses which are not used by the end of the Parks Department fiscal year are retained by the Parks De partment and included in the Statement of Functional Expenses as Program Service and Management

10 Page 9 Notes to Financial Statements NOTE 5: PREPAID EXPENSES - CITY OF NEW YORK/PARKS & RECREATION (continued) and General Expenses. Prepaid Expenses City of New York/Parks & Recreation expire on June 30, 2011 if not utilized before such date. NOTE 6: TBTA TRANSACTION & SUBSEQUENT EVENTS In connection with a n agency transaction performed by the Fo undation between the Triborough Bridge and Tunnel Authority and the Parks Department ( TBTA Transaction ), the Foundation recognized income of approximately $1,200 for 2009, classified as grants and contributions revenue, which reflects the approximate amount of interest earned on cash held as agent during the transaction. The New Yo rk City Office of the Compt roller ( Comptroller ) completed an au dit of th e Foundation s compliance with its License Agreement with the Parks Department on May 5, The audit report includes a recommendation that the Foundation repay $109,000 to the City. This am ount represents cumulative imputed interest earned on cash held as agent during the TBTA Transaction. Pursuant to the Com ptroller s Audit, the Foundation made a gra nt of $109,000 to the Parks Department on March 25, NOTE 7: PLEDGES & CONTRIBUTIONS The New York City Economic Development Corp. has contracted with the Foundation to provide funds for the design of redeveloped sports fields and a tennis center on Randall s Island. These funds are paid to the Foundation as expenses are invoiced. During 2010 and 2009, pursuant to the contra cts, the Foundation made paym ents of $595, 356 and $968,665, respectively, which were reimbursed by the Ne w York City Economic Development Corporation for the sports fields and tennis center development projects. The reimbursements are included in P ledges and Contributions on the Statement of Activities and the related expenses are included in Contracted services and professional fees on the Statement of Functional Expenses. NOTE 8: IN-KIND SUPPORT AND CONTRIBUTED SERVICES The Parks Department allows the Foundation to use some of its space located at 2 4 West 61 st Street, New York, NY. No rent is paid by the Foundation. The Foundation has estimated the rental value based on average asking rents for their location. In addition, the Parks Department allows the Foundation to use its phones and computer equipment, and provides the Fou ndation with some office supplies. The value of th e in-kind contributions from the Parks Department for th e years ended December 31, 2010 and 2009 amounted to $98,115 for each year. These amounts are included in the statement of activities as in-kind support and are offset by like amounts included in expenses. The Foundation received contributed professional services d uring the yea rs ended December 31, 2010 a nd 2009, with estimate d values of $17,400 and $15,000, respectively. These amounts are included in the statement of activities as in-kind support and are offset by like amounts included in expenses.

11 Page 10 Notes to Financial Statements NOTE 8: IN-KIND SUPPORT AND CONTRIBUTED SERVICES (continued) Additionally, a substantial number of volunteers have donated significant amounts of their time to the F oundation for various p rojects. No am ounts have been recognized in the accompanying statement of activities beca use the crite ria for recognition of su ch volunteer effort under generally accepted accounting principles have not been satisfied. NOTE 9: CAPITAL IMPROVEMENTS The Foundation s staff works to secure and manage a va riety of capital f unds from government agencies and private sources for the restoration and development of Randall s Island. The capital funds which are a result of this significant investment in time and resources are not reflected in these financial statements. Capital improvements developed through public funding secured by the Foun dation are ongoing, and include Waterfront Pathways, Environmental Restoration, Seawall Reconstruction, Infrastructure & Access Improvements, and Sports Fields Development. NOTE 10: 403(b) SAVINGS PLAN The Foundation has a 403(b) savings plan (the Plan ). Participation in the savings part of the Plan is voluntary. Participants are eligible to contribute salary reductions on their first day of employment. Participants are eligible for employer contributions upon completion of one year of service and attainment of age 21. Employer contributions are discretionary and are shared pro-rata among eligible Participants for the year. Employer co ntributions for the years ended December 31, 2010 and 2009 were $16,030 and $58,05 5, respectively. The employer contributions for 2010 and 2009 include $12,189 and $45,000 of corrective contributions, respectively. The Foundation amended the Pla n in 2010 to provide for employer matching contributions only to eligible plan participants. NOTE 11: LITIGATION AND CONTINGENCIES In June 2009, Randall s Island Fields Group, LLC (the Fields Group ) entered into a sole source license agreement with the Parks Department and the Foundation which provided the Fields Group the right to use certain sports fields on Randall s Island during certain hours in exchange for $400,000 annual concession payments to the Fou ndation and certain other payments to the Parks De partment. The lice nse agreement was subsequently nullified by the Supreme Court of New York State New York County, as a result of legal action taken by a group of petitioners. Under an agreement between the Parks Department and th e petitioners (the Ag reement ), if the sole source license agreement were to remain nullified after all appeals were final and have been exhausted, the Foundation must return the $400,000 received from the Fields Group in Since the Agreement was nullified in the Su preme Court, a liability of $400,00 0 has been accrued. However, the Parks Department still has the ability to appeal the decision if it so chooses. Nevertheless, the Foundation s management believes that the return of funds is probable.