Thursday, May 17, 2001

Estate’s revenues
hit record
$996 million
in 2000

The sale of Goldman Sachs
stock figures largely in the
18.7 percent rise for
Kamehameha Schools

By Rick Daysog

The Kamehameha Schools posted record revenues last year due in large part to the sale of its stock in Goldman Sachs Group Inc.

The charitable trust said its total revenue for the year ended June 30, 2000, was $995.9 million, an 18.7 percent rise from the year-earlier's $839 million.

The $5.7 billion estate - founded in 1884 to educate children of Hawaiian ancestry - said that its subsidiaries and outside investments netted $567.9 million last year, including the Goldman Sachs sales. Last year, the trust sold 11 million shares, worth about $1 billion.

Its real estate arm, Bishop Holdings Corp., produced $38.7 million, while its Southern Nevada Income Properties subsidiary netted $24.3 million.

In a tax filing with the Internal Revenue Service, the trust reported that it spent $132.7 million on its educational program and construction, down 7.2 percent from 1999's $143 million.

The difference in educational spending was largely due to more construction and land purchases made during the estate's 1999 fiscal year.

Over the long term, the estate said it plans to spend between $125 million and $300 million a year on its Kapalama Heights campus, its neighbor island satellite campuses and various outreach programs.

The trust said that a total of 4,862 students were enrolled in its kindergarten through 12th grade programs last year. The estate also said it served 5,955 students in Kamehameha Schools-supported programs in the state Department of Education.

The tax filing also provided a detailed description of the salaries paid to trustees, staffers and expenditures made to its outside contractors.

Former interim trustees David Coon, Francis Keala, Ronald Libkuman and Constance Lau each earned $192,500 during the 2000 fiscal year while retired Admiral Robert Kihune, the board's chairman, was paid $203,500.

In January, the interim board was replaced by a permanent board, which included Lau, Kihune, attorney Douglas Ing, local business executive Diane Plotts and Hawaiian navigator Nainoa Thompson.

Hamilton McCubbin, who became the trust's first chief executive officer in February 2000, was paid $122,031 for the February 2000 to June 2000 period. McCubbin's contract called for a salary of about $300,000 for the 2000 calendar year. School President Michael Chun earned $213,578 during the 2000 fiscal year while Nathan Aipa, the estate's former acting chief operating officer, earned $195,451. Aipa currently serves as special projects officer.

As for the trust's outside contractors, the Washington D.C. law firm of Miller & Chevalier was paid $3.4 million for work relating an IRS audit and the removal of the former trustee last year while the accounting firm of KPMG Consulting LLC billed the trust $1.3 million. Cades Schutte Fleming & Wright billed the trust $1.3 million while Watanabe Ing & Kawashima was paid $1.2 million.

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