The ALS Association Annual Report - FYE January 31, 2012.

2012 Annual Report

THE ALS ASSOCIATION GAINING GROUND ON A POWERFUL ADVERSARY

1275 K STREET NW

SUITE 1050

WASHINGTON DC 20005

PHONE 202 407 8580

alsa.org

MISSION Leading the fight to treat and cure ALS through global research and nationwide advocacy while also empowering people with Lou Gehrig’s Disease and their families to live fuller lives by providing them with compassionate care and support.

VISION Create a world without ALS

MESSAGE FROM JANE H. GILBERT The ALS Association President and Chief Executive Officer

Everyone touched by amyotrophic lateral sclerosis (ALS) shares a common dream: to once and for all put an end to this cruel disease known as Lou Gehrig’s Disease. For many decades, progress seemed nonexistent, until 1985, when the newly-formed ALS Association funded research to investigate the genetic origins of ALS. In 1991, a remarkable discovery was made, the link between ALS and the gene superoxide dismutase 1 (SOD1).

Shortly thereafter, genetic engineers developed the first animal model to closely replicate the effects of the disease. For the first time, scientists could use a SOD1 transgenic mouse model to explore the progression of the disease and test potential therapies. This created a significant increase in interest among researchers to focus on ALS. For the next few years, the body of knowledge about Lou Gehrig’s Disease increased incrementally; however, all of that changed during The Association’s fiscal year that ended on January 31, 2012.

This has been a year of very significant discoveries.

Among these findings were a common mechanism and an abnormal protein accumulation, which were identified in both familial and sporadic ALS and frontotemporal dementia. In another important study, two proteins with a similar structure

and function, TDP-43 and FUS, were linked to familial ALS with and without frontotemporal dementia. In addition, two ALS Association-funded researchers, working independently, discovered a genetic sequence that was repeated an unusually large number of times. Known as C9orf 72, this protein is thought to be the cause of at least one-third of all familial cases of ALS. As a result, researchers have identified many areas ripe for investigation.

The ALS Association is proud to have played a role in bringing about these accomplishments, and the generous support from people like you, who share our passion, made it all possible. These and other recent discoveries have sparked explosive interest among ALS researchers and have generated a new sense of hope in the ALS community.

While this news is promising, nothing short of effective therapies for the treatment and eventual cure for ALS will be acceptable. Thousands of Americans face the devastation of this disease every day, and families and friends work tirelessly to provide care and comfort to their loved ones.

The ALS Association is there, working in communities across the nation, to support people as they courageously battle ALS, one day at a time.

The ALS Association also provides a strong voice to help steer government funding toward ALS

research, that influence Congress to support measures that benefit the ALS community, and to encourage agencies, such as the Department of Defense to provide benefits to veterans and their families, since for unknown reasons people who served in the military are twice as likely to die from ALS as the general public.

Perhaps most important, The ALS Association directs and funds the most comprehensive, global research program in the world. Working with and energizing the foremost experts in the field of ALS research, The Association partners with academia, industry, government and other ALS organizations in the spirit of collaboration. Throughout the year, The Association sponsors and participates in national and international workshops and symposia to provide a platform for the active exchange of ideas among top scientific minds to accelerate the development of effective treatments for people fighting this disease.

Recently published results are encouraging, but now is the time to increase the intensity of our work and spur the research community to make our vision to “create a world without ALS” a reality. The ALS Association appreciates the support of those who share our vision, and we are excited about the promise of the future.

1

A disease so destructive that it befell baseball’s Iron Horse was

not likely to be taken down easily. So it has come as no surprise that amyotrophic lateral sclerosis (ALS)––also known as Lou Gehrig’s Disease, after the famously durable New York Yankee first baseman who played in 2,130 consecutive games before ALS cut short first his career, then his life–– has proved to be a most difficult adversary.

approved drug capable of slowing the disease’s course––modestly, and only in some patients.

But since 1985, ALS has faced an opponent that is tenacious and unrelenting in its determination to relegate this awful disease to the history books, while simultaneously fighting to make the lives of people with ALS and their families easier.

And make no mistake, momentum is on the side of The ALS Association and the community it supports––from the researchers laboring every day to find better treatments and a cure, to the people with Lou Gehrig’s Disease and their loved ones, for whom The Association provides support through advocacy, care services, and public awareness.

ALS is a progressive, degenerative neuromuscular disorder that takes hold of men and women, often at the prime of their lives, and steadily robs them of their capacity to initiate and control muscle movement and, eventually, their ability to speak, walk and breathe. The typical life expectancy from the time of an ALS diagnosis is two to five years.

For people with Lou Gehrig’s Disease and for those who love them––the spouses, children, siblings, parents, caregiver and friends––the journey can take an excruciating toll, emotionally as well as physically.

The ALS Association is the only national nonprofit organization fighting Lou Gehrig’s Disease on every front. Whether supporting groundbreaking research, working with policymakers on behalf of the ALS community, providing state-of-the-art care and services, or enlisting public support for the cause, The Association is investing in a future without Lou Gehrig’s Disease––and a better present for those currently living with ALS. Each year, we take significant strides toward our ultimate goal––and fiscal year ending (FYE) 2012 was a year in which we made substantial progress.

It’s been more than 70 years since Gehrig, in one of the most famous speeches of the 20th century, announced his diagnosis and said goodbye to his teammates and fans. For most of that time, ALS has remained a remarkably stubborn foe: There has been little understanding of its cause, no cure or means of prevention, and just one FDA-

Investments in Research Paying Off Throughout its history, The ALS Association has served as a catalyst for research that is homing in on the processes involved in Lou Gehrig’s Disease, knowing that such an understanding can lead to better treatments and a cure or strategies to prevent ALS from occurring in the first place. The

Association funds a coordinated global research effort involving a wide range of projects, as well as strategies to accelerate the translation of laboratory discoveries into clinical trials for promising drugs.

The systematic and comprehensive approach to this global research portfolio includes funding grants to attract the most promising young scientists to the ALS field. It involves bringing together diverse groups of investigators to exchange ideas and forge new collaborations. It means fueling innovation and breaking down scientific barriers.

In a year in which 60 research projects were funded by The Association, FYE 2012 was marked by a major research breakthrough: the discovery that abnormalities in a gene, C9orf72, represent the most common known cause of both sporadic and familial ALS, as well as frontotemporal dementia (FTD). The landmark finding came out of the laboratories of two independent research teams, both funded by The Association––one at the Laboratory of Neurogenetics of the National Institute on Aging in Bethesda, Maryland, and one at the Mayo Clinic in Jacksonville, Florida.

2

The discovery of the C9orf72 mutation and its relationship to ALS and FTD represents the first genetic link between the two diseases and has fueled intensive research among scientists in both fields, opening up new avenues of pursuit and drawing new scientists into the field of ALS research. The mutation accounts for one-third of familial ALS cases and is the strongest genetic risk factor identified to date for the more common, non-inherited (sporadic) forms of ALS and FTD. Combined with other recently discovered gene abnormalities linked to ALS, the discovery provides hope that scientists can unleash the power of genetic research to reveal the secrets of ALS progression and identify targets for drug development.

Already, researchers are beginning to capitalize on this knowledge by developing animal models and using induced pluripotent stem cells from people carrying this genetic defect to develop model systems that can help them understand the mechanisms involved. To facilitate such studies, The Association held a strategic meeting with the world’s top investigators and funded a large collaborative study in the United States and United Kingdom.

As a result of this meeting, three international groups have been funded by The ALS Association to develop animal models for the C9orf72 mutation and a therapeutic approach in partnership with ISIS Pharmaceuticals, Inc. In addition, new collaborations have been forged with investigators in related fields, who will contribute significantly to understanding the biology of diseases associated with these mutations.

TREAT ALS™ Accelerates Testing of Drug Candidates The Association continued to build momentum for ALS research in FYE 2012 through TREAT ALS (Translational Research Advancing Therapy for ALS), a pipeline of important funding initiatives including partnerships with government agencies and industry. As part of the TREAT ALS portfolio, we funded 11 new ALS Association-initiated awards; five new Milton Safenowitz Post-Doctoral Fellowships to bring talented young investigators into the ALS research field; and 20 new investigator-initiated awards in laboratories throughout the United States, United Kingdom, Belgium, Italy and Spain (in addition to 18 ongoing investigator-initiated research projects that were started in FYE 2010 and 2011).

Funding was also renewed in FYE 2012 for two critical resources for the clinical and research community. The resources provided through the TREAT ALS/NEALS Clinical Trials Network were expanded to include a new website (www. alsconsortium.org/search.php) devoted to supporting clinical research in ALS and other motor neuron diseases (MND). The website, supported by a partnership with the ALS Therapy Alliance and The ALS Association, increases the availability, clarity, and accuracy of clinical research information for the ALS and MND community.

assist in making predictions, such as the effect of mutations on protein structure and function. The ALSoD website is designed to allow easy access to information about ALS-causing gene variants and their effects on clinical patterns of ALS. In FYE 2012, The Association also sponsored and organized important workshops where researchers shared knowledge and exchanged ideas. In Tarrytown, New York, at a conference co-sponsored by The Greater New York Chapter of The ALS Association, more than 150 experts on Lou Gehrig’s Disease convened to generate plans for testing new ALS treatments, and a faculty of some 50 ALS experts from the United States, England, Canada, and France presented the latest information on clinical ALS research. In Boston, leaders from academia and industry met to discuss the next steps to identify improved ALS biomarkers–– early biological changes that signal the onset of the disease, enabling earlier diagnosis and increasing the ability of clinical trials to measure benefits.

The Milton Safenowitz Post-Doctoral Fellowship Symposium, sponsored and hosted by The Greater New York Chapter of The ALS Association, provided an opportunity for the fellows to share ongoing research with their peers.

Renewed funding also ensured the continued success of The ALS Online Genetics Database (ALSoD), a website (http://alsod.iop.kcl.ac.uk) featuring a regularly updated summary of all of the knowledge about ALS genetics from around the world. ALSoD provides multiple tools to analyze genes that have been studied extensively, such as TARDBP and SOD1, as well as tools to 3 5

Fighting for the Interests of the ALS Community While serving as a catalyst for a comprehensive worldwide research effort, The ALS Association is also focused on making the case at the federal, state, and local levels for funding and policies that will support ALS research and people currently living with the disease and their families. In FYE 2012, The Association continued to serve as an influential voice for the ALS community through a variety of advocacy efforts.

One of the most powerful was The ALS Association’s National ALS Advocacy Day and Public Policy Conference, held each year in Washington, D.C. In FYE 2012, this conference brought in advocates from almost every state in the country, including nearly 100 people with ALS, 30 of them military veterans. At the conference, The Association presented the Jacob Javits Public Service Award to General James Peake, former Secretary of Veterans Affairs, who implemented regulations that made ALS a service-connected disease–– providing veterans with ALS and their survivors access to the highest level of health and disability benefits.

FYE 2012 also included the fourth annual “Advocacy Fly-In” in the nation’s capital. The event featured the participation of key ALS Association chapter leaders and advocates represented by members of the House and Senate committees with jurisdiction over funding for the National ALS Registry and the ALS Research Program.

During the event, advocates held nearly 150 meetings with members of Congress and attended educational and training sessions held by experts.

The Association also entered into a partnership with the Centers for Disease Control and Preven-

tion (CDC) to help raise awareness of the National ALS Registry. Every person in the United States with ALS can enroll in the registry, which is collecting critical information about the disease that will improve care for people with ALS and provide invaluable clues about what causes the disease, how it can be treated and even how it might be prevented. In a strong sign of support on Capitol Hill, nearly 50 members of Congress signed a letter urging the House Appropriations Committee to continue funding for the registry––almost 15 more members than had done so in FYE 2011.

The effort was led by New York Reps. Eliot Engel (D) and Peter King (R), and it paid off: Congress appropriated an additional $6 million to continue the ALS Registry in FYE 2012. The funding will help to support expansion of the registry, including the development of new modules that collect additional data about ALS cases, such as head trauma and occupational and residential history.

A national outreach campaign helped to generate awareness and support for the ALS cause leading up to Veterans Day. As part of the campaign, more than 30 letters to the editor were published in newspapers across the country, drawing attention to The ALS Association and the connection between ALS and military veterans, who are approximately twice as likely to develop ALS as the general public. A “Wall of Honor” was established on The Association’s website with photos of veterans with ALS along with their names, hometowns, branches of service, and personal stories. By the end of the year, the wall featured 170 veterans from more than 40 states and every branch of the military, ranging from those who served before World War II to those still on active duty in 2012.

The Association also placed several advertisements in the print and online versions of three widely

read Capitol Hill publications: Roll Call, Politico and The Hill. The ads featured a veteran with ALS from Alabama and urged support for the reauthorization of the Prescription Drug User Fee Act, which will help to speed the development of new treatments for ALS. Each ad prominently featured The ALS Association logo and a description of ALS. Daily visits to The ALS Association website nearly tripled as a result.

These and other efforts continued to yield benefits.

The Department of Veterans Affairs implemented new regulations, strongly supported by The Association, to automatically provide a 100-percent disability rating to all veterans with ALS; previously, veterans automatically qualified for a minimum rating of 30 percent. With the new regulations, veterans with ALS receive a minimum disability compensation of $2,673 per month, increased from $376 per month. However, this is just the minimum level of compensation; veterans may qualify for as much as $8,000 per month in compensation or close to $100,000 per year.

Nearly 70 members of Congress signed a letter urging the Appropriations Committee to support continued funding for the ALS Research Program (ALSRP) at the Department of Defense (DOD).

This marked the first time such a letter had been organized in the House and represented a tremendous show of support, considering that some in Congress were discussing eliminating all medical research at the DOD, including the ALSRP. The campaign was led by Reps. Elton Gallegly (R-CA) and Chellie Pingree (D-ME). Ultimately, the House Appropriations Committee passed the FYE 2012 DOD Appropriations Act, including $6.4 million for the ALSRP. 4

Providing Compassionate Care and Support Fighting to improve the lives of people with ALS also means providing them with compassionate care and support. Both at the national level and through our coordinated network of chapters, centers, and clinics, The Association supports those living with Lou Gehrig’s Disease and their families in a variety of ways. The Association also assists patients and families in facing the daily challenges of living with ALS by providing information, resources, and referrals, as well as other means of support. In addition, 34 ALS Association Certified Centers of ExcellenceSM provide multidisciplinary state-of-the-art medical care.

Texas Chapter in Dallas to better serve the ALS community throughout the state.

A nationwide network of 38 professionally staffed chapters form the backbone of The Association, working at the community and regional levels to provide information, resources, and support services for people living with ALS and their families. The Association supports these chapters by providing leadership training and mentoring, as well as opportunities for networking and collaboration. Services include board and staff development consultation; strategic planning guidance; development planning and consultation; operational planning and consultation; an online social networking site for chapter staff and volunteers; an annual leadership summit; and benchmark data and standards.

In FYE 2012, The Association also provided a wide variety of important care-related services to people living with ALS, their families and caregivers, as well as practitioners, professional ALS Association chapter staff, and the general public.

Many of these services involved information and education. For example, in FYE 2012, the electronic newsletter The Exchange, which each month reached 15,000 people who subscribed through The Association website. Another monthly electronic newsletter, Care Services News You Can Use, was sent to professional staff members who provide care services through ALS Association chapters. In addition, approximately 75 different pieces of educational and informational printed materials were available to those diagnosed with ALS, their caregivers, and professional practitioners. Many materials were also available in DVD and downloadable video formats. In addition, selected print and video materials were translated into Spanish to increase accessibility for Spanish-speaking patients, families and practitioners.

One of the most exciting developments within our chapter network unfolded in Texas, where three ALS Association chapters completed the process of merging into The ALS Association Texas Chapter.

The new chapter, based in Irving, will build on the legacy of the South Texas Chapter in San Antonio, the Greater Houston Chapter, and the North

All told, chapter revenue increased by five percent in FYE 2012, to more than $44 million. Twenty chapters contributed almost $3 million to ALS research. The Association’s chapter system gave $1.5 million to the 34 Certified Centers of Excellence around the country and another $722,000 to 38 ALS clinics. Approximately 1,800 support groups were offered in more than 300 different locations, and The Association provided services to more than 23,000 people living with ALS and their caregivers.

Monthly webinars were held in FYE 2012 on the ever-expanding low-tech and high-tech assistive technology used to treat or improve the quality of life for people living with the disease. At the annual National ALS Advocacy Day and Public Policy Conference, the medical industry was given a forum to showcase features and benefits of technology, equipment, products, and services designed to improve treatment or quality of life for people living with ALS. For ALS chapter, center, and clinic professionals, webinar “topic calls” brought leading-edge and best-practice information on ALS research, care, support and treatment. The Association also endeavored to bring ALS investigators closer to the ALS community by providing frequent updates on the most exciting ongoing research through monthly webinars featuring internationally renowned ALS scientists.

5

Enlisting the Public to Join the Cause As a recognized authority and the most trusted source of information and education about Lou Gehrig’s Disease, The Association continues to boost public awareness about ALS and enlist support for the cause of defeating this disease while empowering the people and families affected by it.

Thanks to a partnership with well-connected Hollywood entertainment executives, The Association in FYE 2012 secured the talent of TV and Broadway star Jason Alexander and the creative production capabilities of Toy Box Entertainment to produce a television public service announcement (PSA). Alexander’s screen presence and reputation were paired with the positive attitude and vibrant personality of Steve Posso, who has lived with ALS since 2007, in a powerful 30-second PSA that began airing in January 2012 on network, regional and cable TV stations nationwide, as well as in movie theaters across the country.

Two new opportunities were established in FYE 2012 for people to support the ALS community and work to defeat the disease. The ALS Promise Fund (www.alspromise.org) enables a family to honor a loved one through a special website, hosted by The Association, which features photographs, videos, stories, and comments from family and friends to create a lasting memory and tribute.

Also, The Association’s One Dollar Difference (http://web.alsa.org/site/PageNavigator/2012_ one_dollar_home.html) is a user-friendly website that assists individuals and groups in organizing and managing a fundraising event.

The Association also capitalized on the soaring influence of social media in FYE 2012 to build support and interact with the ALS community and general public. The increased use of Facebook, Twitter, and other electronic social media

platforms opened up new opportunities to communicate with these audiences in a direct and interactive manner.

Moving Closer to the Ultimate Goal Lou Gehrig never knew an opponent like ALS, nor have the 350,000 people worldwide who are currently struggling with the disease. But on behalf of these individuals and their loved ones, as well as the millions more who have succumbed over the years and their survivors, a powerful ally is giving ALS a fight like it’s never seen. The ALS Association is engaged in a continual effort to improve the lives of people with Lou Gehrig’s Disease and a relentless pursuit of better treatments and a cure.

Each year, we move closer to our ultimate goal of a world without ALS. We will not rest until we get there.

In addition to spreading the word about Lou Gehrig’s Disease, The Association helped to promote the efforts of those who work at the grassroots level to make a difference. This included ALS Association chapters that partnered with Major League Baseball and Minor League Baseball teams to raise ALS awareness in commemoration of Lou Gehrig’s famous “Luckiest Man” speech. In May, ALS Awareness Month, more than 30 people with ALS were highlighted on The Association’s website and in news releases sent to local media markets.

The website also showcased the selfless work of ALS caregivers––along with providing regular caregiving tips––during National Family Caregivers Month.

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CONTENTS

Independent Auditors’ Report 8 Statement of Financial Position 9 Statement of Activities 10 Statement of Functional Expenses 11 Statement of Cash Flows 12 Notes to the Financial Statements 13-17

7

INDEPENDENT AUDITORS’ REPORT The Board of Trustees The Amyotrophic Lateral Sclerosis Association We have audited the accompanying statement of financial position of The Amyotrophic Lateral Sclerosis Association (The “Association”) as of January 31, 2012, and the related statements of activities, functional expenses, and cash flows for the year then ended. These financial statements are the responsibility of The Association’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from The Association’s 2011 financial statements and, in our report dated June 3, 2011, we expressed an unqualified opinion on those financial statements.

We conducted our audit in accordance with auditing standards 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 material misstatement.

An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of The Association’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial 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 The Association at January 31, 2012, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Long Beach, California May 17, 2012 8

STATEMENT OF FINANCIAL POSITION JANUARY 31, 2012, WITH COMPARATIVE TOTALS FOR 2011

ASSETS

2 01

JANUARY 31, 2012

2011

ASSETS

Cash and cash equivalents $ Investments in marketable securities Receivables: Bequests, net Chapters, net Pledges, net Other Prepaid expenses Beneficial interest in perpetual trusts Contributions receivable from charitable remainder trusts Property and equipment, net Other assets

6,834,970 $ 9,340,476 6,724,420 2,330,676 731,231 3,724,841 321,402 174,318 305,027 939,667

1,321,755 2,814,453 498,545 24,163 158,646 627,669

291,389 165,883 43,191

303,793 279,028 43,191

TOTAL ASSETS $ 20,256,339

$ 17,742,395

LIABILITIES AND NET ASSETS LIABILITIES

Grants payable $ Accounts payable and accrued expenses Annuity payment liability Deferred rent

453,556 $ 1,345,885 1,167,003 1,747,643 754,538 611,931 385,859 148,903

Total liabilities

2,760,956

$

$ 3,854,362

COMMITMENTS (Note 5) NET ASSETS

Unrestricted Temporarily restricted Permanently restricted

8,106,576 8,492,325 896,482

6,719,179 6,301,552 867,302

Total net assets

17,495,383

13,888,033

TOTAL LIABILITIES AND NET ASSETS

$ 20,256,339

$ 17,742,395

See Independent Auditors’ Report. The accompanying notes are an integral part of these financial statements.

9

STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JANUARY 31, 2012, WITH COMPARATIVE TOTALS FOR 2011

UNRESTRICTED

TEMPORARILY RESTRICTED

PERMANENTLY RESTRICTED

TOTAL 2012

2011

SUPPORT AND REVENUE

Contributions $ 5,387,005 $ 1,790,128 $ 7,177,133 $ 6,665,712 Bequests 1,456,358 1,766,440 3,222,798 3,875,236 Chapters 4,718,041 2,854,635 7,572,676 6,278,045 Events 725,631 725,631 634,551 Federated campaigns 334,174 334,174 309,134 Interest income 106,484 13,483 119,967 55,620 Realized/unrealized gain (loss) on marketable securities ( 60,734) 39,942 ( 20,792) 258,980 Other income 54,211 54,211 71,324 Gain on beneficial interest in perpetual trusts $ 29,180 29,180 35,129 Change in value of split-interest agreements ( 172,401) ( 172,401) 35,501

12,721,170 6,292,227 29,180 19,042,577 18,219,232 Net assets released from restrictions 4,101,454 ( 4,101,454) Total support and revenue

16,822,624

2,190,773

29,180 19,042,577 18,219,232

EXPENSES

Research grants 3,904,240 3,904,240 2,980,858 Patient and community services 4,629,111 4,629,111 3,846,490 Public and professional education 1,859,100 1,859,100 1,917,018 Fundraising 3,269,624 3,269,624 3,290,501 Administration 1,773,152 1,773,152 1,814,542 Total expenses CHANGE IN NET ASSETS NET ASSETS–

Beginning of year NET ASSETS–

End of year

$

15,435,227

15,435,227

13,849,409

29,180 3,607,350

4,369,823

1,387,397

2,190,773

6,719,179

6,301,552

867,302

13,888,033

8,106,576 $

8,492,325

896,482

17,495,383

$

$

9,518,210

$ 13,888,033

See Independent Auditors’ Report. The accompanying notes are an integral part of these financial statements.

10

STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JANUARY 31, 2012, WITH COMPARATIVE TOTALS FOR 2011

PROGRAM ACTIVITIES

RESEARCH GRANTS

SUPPORTING ACTIVITIES

TOTAL EXPENSES

PATIENT AND PUBLIC AND COMMUNITY PROFESSIONAL SERVICES EDUCATION TOTAL FUNDRAISING ADMINISTRATION TOTAL

2012

2011

EXPENSES BEFORE

DEPRECIATION Grant awards

$

3,499,719

$

Chapter support

543,863

$

760,579

Salaries and related expenses Printing, publications, and Printing, publications, and publicservice serviceannouncements announcements public

Professional fees fees and and Professional contract contractservices services

30,009

1,784,000

493 238,233

Postage and shipping Rent and occupancy Travel and conferences Telecommunications Office supplies Dues and subscriptions

4,043,582

$

760,579 $

$

1,330,656

$

2,871,009 691,944

2,355,131

4,865,099

4,429,338

2,509,968

189,229

150,733

340,455

82,715

4,309

87,024

427,479

403,388

561,738

446,683

1,246,654

1,385,784

266,439

1,652,223

2,898,877

2,754,835

28,047

4,136

32,183

70,794

18,373

89,167

121,350

149,184

251,714

101,495

353,209

168,892

262,686

431,578

784,787

572,050

125,285

343,307

386,763

855,355

73,103

61,754

134,857

990,212

1,117,344

2,549

53,825

18,955

75,329

39,216

39,520

78,736

154,065

161,291

55

14,547

3,228

17,830

6,635

10,844

17,479

35,309

32,952

234

18,690

29,697

48,621

15,312

44,905

60,217

108,838

83,867

75,200)

156,141

20,992

4,151

25,143

64,412

77,452

141,864

167,007

160,675

3,896,577

4,570,531

1,841,800

10,308,908

3,237,519

1,735,557

4,973,076

15,281,984

13,584,018

7,663

58,580

17,300

83,543

32,105

37,595

69,700

153,243

265,391

(

Miscellaneous

DEPRECIATION

$

$

760,579

695,959

Bad-debt (recoveries) expense Total expenses before Total expenses before depreciation depreciation

1,024,475

4,043,582

75,200)

(

75,200)

2012 TOTALS

$

3,904,240

$

4,629,111

$

1,859,100

$

10,392,451

$

3,269,624

$

1,773,152

$

5,042,776

2011 TOTALS

$

2,980,858

$

3,846,490

$

1,917,018

$

8,744,366

$

3,290,501

$

1,814,542

$

5,105,043

(

$

15,435,227 $

13,849,409

PERCENTAGE OF TOTAL EXPENSES 2012 2011

25.3% 21.5%

30.0% 27.8%

12.0% 13.8%

67.3% 63.1%

21.2% 23.8%

11.5% 13.1%

32.7% 36.9%

100.0% 100.0%

See Independent Auditors’ Report. The accompanying notes are an integral part of these financial statements.

11

CONSOLIDATED FINANCIAL SUMMARY NATIONAL OFFICE AND CHAPTERS

STATEMENT OF CASH FLOWS JANUARY 31, 2012, WITH COMPARATIVE TOTALS FOR 2011 FOR THE YEAR ENDED JANUARY 31,

2012 2011

FOR THE YEAR ENDED JANUARY 31, 2012

TOTAL COMBINED REVENUE $55,446,772 CASH FLOWS FROM OPERATING ACTIVITIES

Change in net assets $ 3,607,350 $ 4,369,823 Adjustments to reconcile change in net assets to net cash flows from operating activities: Depreciation 153,243 265,391 Realized/unrealized (gain) loss on investments 20,792 ( 258,980) Contribution of equipment ( 22,817) Noncash contributions to investments ( 33,158) ( 109,040) Change in beneficial interest in perpetual trusts ( 311,998) ( 35,129) Change in value of charitable remainder trusts 12,404 ( 105,420) Changes in operating assets and liabilities: Receivables: Bequests, net 590,524 ( 523,610) Chapters, net ( 910,388) 1,322,921 Pledges, net 177,143 85,893 Other ( 150,155) 15,807 Prepaid expenses ( 146,381) ( 8,755) Other assets ( 4,860) Grants payable ( 892,329) ( 2,040,848) Accounts payable and accrued expenses ( 580,640) 126,124 Annuity payment liability 142,607 ( 14,877) Deferred rent 236,956 67,978 Net Cash Provided by Operating Activities 1,915,970 3,119,601

PERCENTAGE TOTAL COMBINED TO TOTAL EXPENSES EXPENSES Research Other program activities Fundraising General & administration

$3,904,240 $32,214,563 $9,169,818 $5,335,872

7.71% 63.63% 18.11% 10.54%

Total expenses $50,624,493

100.00%

Change in net assets: $4,822,279

The consolidated summary has not been audited or reviewed by the auditors and is not part of their financial reports.

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sold and matured investments Purchases of investments ( Purchases of property and equipment ( Net Cash Provided By (Used In) Investing Activities (

2,193,407 551,611 6,574,785) ( 444,419) 40,098) ( 30,039) 4,421,476) 77,153

NET CHANGE IN CASH AND CASH EQUIVALENTS

2,505,506) 3,196,754

(

CASH AND CASH EQUIVALENTS–Beginning of year

9,340,476

CASH AND CASH EQUIVALENTS–End of year

6,834,970

$

6,143,722

$ 9,340,476

See Independent Auditors’ Report. The accompanying notes are an integral part of these financial statements.

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NOTES TO THE FINANCIAL STATEMENTS JANUARY 31, 2012, WITH COMPARATIVE TOTALS FOR 2011

NOTE 1––Description of Operations and Summary of Accounting Policies The Association The Amyotrophic Lateral Sclerosis Association (The Association or ALSA) was organized in 1985 through the merger of its predecessors, The Amyotrophic Lateral Sclerosis Society of America and The National ALS Foundation, Inc. The Association’s principal purpose is to fund research directed at finding the cause and cure for the disease, amyotrophic lateral sclerosis (ALS), commonly known as “Lou Gehrig’s Disease,” and to provide educational and other services to patients and their families, health care professionals, legislators, and local communities, principally through the dissemination of informative literature and presentation of public awareness and advocacy programs and scientific symposiums and by accrediting, with local chapter support, activities of patient care clinics known as ALSA Centers.

The Association is a not-for-profit, voluntary health organization, exempt, together with its affiliated chapters, from federal income taxes under Section 501(c)(3) of the Internal Revenue Code (the Code). ALSA and its chapters are classified collectively as a publicly supported charitable organization under Section 509(a)(1) and qualify for the maximum charitable contribution deduction by donors under Section 170 (b)(1)(A)(vi) of the Code.

These financial statements do not include the accounts of affiliated chapters since, subject to their agreements with ALSA, they are independently controlled by their own governing boards.

Basis of Presentation The accompanying financial statements include a statement of financial position that presents the amounts for each of three classes of net assets–– unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets–– based on the existence or absence of donorimposed restrictions, a statement of activities that reflects the changes in those categories of net assets, and a statement of functional expenses that associates expenses with service efforts.

Unrestricted net assets include those net assets that may be used by The Association for any of its programs or administrative support. Temporarily restricted net assets include those net assets whose use by The Association has been limited by donors to specified purposes or time restrictions. Permanently restricted net assets include those net assets that must be maintained in perpetuity.

Prior-Period 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 America. Accordingly, such information should be read in conjunction with The Association’s financial statements for the year ended January 31, 2011, from which the summarized information was derived.

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents Cash equivalents are defined as money market funds and other highly liquid investments with original maturities of three months or less at the date they are purchased.

Investments in Marketable Securities Investments are initially recorded at cost if purchased, or at fair value at the date of donation if contributed. Subsequent to acquisition, investments are reported at their fair value. Investment income and realized and unrealized gains and losses are recognized as unrestricted net assets unless their use is temporarily or permanently restricted by donors to a specified purpose or future period.

The fair value of investments in securities traded on a national securities exchange are valued at the closing price on the last business day of the fiscal year, whereas securities traded on the over-thecounter market are valued at the last reported bid price.

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NOTE 1––Description of Operations and Summary of Accounting Policies (CONT’D) Financial Risk The Association maintains cash in bank deposit accounts which, at times, may exceed federally insured limits. The Association places its cash with high-quality financial institutions and has not experienced any losses in such accounts.

The Association’s investments are exposed to various risks, such as market and credit risks. Due to the level of risk associated with such investments and the level of uncertainty related to changes in the value of such investments, it is at least reasonably possible that changes in risks in the near term could materially affect investment balances and the amounts reported in the financial statements.

Contributions and Bequests Contributions, including endowment gifts and pledges, are recognized as support in the period received or pledged. Unconditional promises to give that are expected to be collected within one year are recorded at their net realizable value.

Unconditional promises to give that are expected to be collected in future years are recorded at the present value of their estimated future cash flows.

Amortization of the discount to present value is included in contribution revenue. Conditional promises to give are not included as support until the conditions are substantially met.

Bequests are recognized at the time The Association’s right to them is established by a court and the proceeds are subject to reasonable estimation.

Donations and bequests received with donor stipulations as to their intended use are reported in the statement of activities as restricted support.

Temporarily restricted net assets are reclassified as unrestricted net assets when restrictions are met.

Contributed services are reported at fair value in the financial statements for voluntary donations of services when those services (1) create or enhance nonfinancial assets or (2) require specialized skills provided by individuals possessing those skills and are services which would be typically purchased if not provided by donation. The Association receives a substantial number of volunteer hours donated by individuals in program services and fundraising campaigns, which are not recorded in the financial statements. Donated materials are recorded at their fair value at the date of the gift.

If donors stipulate how long donated assets must be used, the contributions are recorded as restricted support. In the absence of such stipulations, contributions of goods are recorded as unrestricted support.

restricted support, depending on the nature of donor restriction, and annual distributions from the trust are reported as investment income that increases unrestricted net assets. At each reporting date, the beneficial interest is remeasured at fair value using the same valuation technique that was used to measure the asset initially and the change in fair value is recognized as temporarily or permanently restricted gains or losses.

The Association is the beneficiary of two charitable remainder trusts for which The Association is not the trustee. The Association recognizes the present value of the estimated future benefits to be received when the trust assets are distributed as temporarily restricted contribution revenue and as a receivable. Adjustments to the receivable to reflect amortization of the discount and revaluation of the present value of the estimated future payments to the lifetime beneficiary are recognized in the statement of activities as change in value of split-interest agreements.

Beneficial interests in perpetual trusts are recognized as revenue when The Association is notified of the trust’s existence in accordance with the terms and provisions of the trust. The fair value of the contribution is estimated using the fair value of the assets contributed to the trust, unless facts and circumstances indicate that the fair value of the beneficial interest differs from the fair value of the assets contributed to the trust. The contribution is classified as temporarily or permanently

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NOTE 1––Description of Operations and Summary of Accounting Policies (CONT’D) Chapter Support The Association has a revenue-sharing practice with affiliated chapters. Chapter support is recognized as support revenue when earned by the affiliated chapter based on the current revenue-sharing plan. At January 31, 2012 and 2011, receivables from chapters resulting from revenue sharing totaled $2,943,231 and $2,722,453 and were recorded net of a reserve for doubtful collections of $365,435 and $440,635, respectively.

Functional Expenses The costs of providing various programs and activities of The Association have been summarized on a functional basis in the statements of activities and functional expenses. The majority of expenses are directly identified with a program, activity, or supporting service and allocated accordingly. Expenses not directly identified are allocated among programs, activities, and supporting services based on the judgment of management.

From time-to-time, The Association may advance funds for working capital needs to affiliated chapters. Generally, repayment of the advances begins one year from the date of the last advance installment. Repayments of these advances are made annually by the chapters over a three-year period.

Advances receivable from chapters amounted to approximately $781,600 and $92,000 at January 31, 2012 and 2011, respectively.

Allocation of Joint Costs The Association is permitted through accounting guidance to allocate to its programs a portion of its costs associated with its fundraising efforts.

Property and Equipment Expenditures for property and equipment are capitalized at cost or, for donated assets, fair value at the time of donation. Depreciation and amortization is provided on a straight-line basis over the estimated useful lives of the related assets, ranging from three to five years.

Research Grant Expense Conditional research grants (see Note 5) are expensed by ALSA as the researchers substantially meet the terms and conditions of the grant during the grant period. Unconditional research grants are expensed when made.

Income Taxes The Association is exempt from federal income taxes under Internal Revenue Code Section 501(c) (3) and state taxes related to revenue received in connection with exempt programs. The Association recognizes the financial statement benefit of tax positions, such as its filing status as tax-exempt, only after determining that the relevant tax authority would more likely than not sustain the position following an audit. The Association is subject to potential income tax audits on open tax years by any taxing jurisdiction in which it operates. The statute of limitations for federal purposes is three years and for state purposes is generally three to four years.

Subsequent Events The Association has evaluated subsequent events and transactions for potential recognition or disclosure through May 17, 2012, the date financial statements were available to be issued.

NOTE 2–Investments in Marketable Securities Investments in marketable securities consist of the following: JANUARY 31,

2012

Mutual funds $ 2,955,154 $ Equity securities 1,697,326 Corporate bonds 1,070,521 U.S. Government 619,883 agency obligations Government-backed 175,362 mortgage securities Corporate mortgage 172,013 securities Others 34,161

2011

1,237,291 943,624 51,409 98,352

$ 6,724,420 $ 2,330,676

Reclassification Certain amounts in the January 31, 2011, financial statements have been reclassified to conform to the 2012 presentation.

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NOTE 3––Pledges Receivables

NOTE 5––Commitments

The Association anticipates collection of outstanding pledges receivable as follows:

JANUARY 31, 2012

2011

Gross amounts due in: Less than one year $ 273,888 $ 328,837 One to five years 203,700 189,125 More than five years 15,000 15,000 492,588 532,962 Less discount to ( 24,011) ( 29,087) present value Less reserve for ( 147,175) ( 5,330) uncollectible pledges

$ 321,402 $ 498,545

Amounts presented above have been discounted to present value using rates ranging from 1.54% to 4.75%.

NOTE 4––Property and Equipment Property and equipment consists of the following:

JANUARY 31, 2012

2011

Furniture and $ 746,514 $ 745,101 equipment Software 314,806 314,806 Leasehold 185,327 185,327 improvements 1,246,647 1,245,234 Less accumulated ( 1,080,764) ( 966,206) depreciation and

amortization

$ 165,883 $ 279,028

Research Grants The Association enters into conditional commitments semiannually to award scientific research grants. Research grants are awarded after review by ALSA’s Scientific Review Committee and approval by the Board of Trustees. Subject to an annual review and reapproval process, these grants generally cover a period of one to three years.

Subject to the grantees’ meeting the applicable terms and conditions timely, conditional grants awarded to date will become payable as follows: YEAR ENDING JANUARY 31,

2013 $ 2,483,498 2014 1,581,490

$ 4,064,988

Except as previously provided for by restricted gifts (see Note 3), The Association’s ability to meet these grant commitments may be dependent on future contributions to be received.

Leases The Association leases offices in California, Illinois, New York, New Hampshire, and Washington, D.C. under operating leases expiring through March 2017. The leases require monthly rental payments and contain certain escalation clauses. In addition, ALSA pays a pro-rata share of real estate taxes and other operating expenses.

Deferred rent payment obligations result primarily from recognition of rent expense on a straight-line basis over the lease period.

Minimum rental payments due under the leases are as follows: YEAR ENDING JANUARY 31,

2013 $ 570,646 2014 572,712 2015 555,957 2016 512,143 2017 36,708

$ 2,248,166

Rent and occupancy expense under the current and prior leases amounted to $784,787 and $572,050 for the years ended January 31, 2012 and 2011, respectively. Rent and occupancy expense for the year ended January 31, 2012, includes an impairment charge on an operating lease agreement totaling $220,048 for excess capacity. This amount has been reported on the accompanying balance sheet within deferred rent.

Purchase Commitments The Association has entered into a purchase agreement with a hotel for guest rooms relating to its annual conferences. Purchases under these agreements are expected to approximate $321,000 and $531,000 for the years ending January 31, 2013 and 2014, respectively. Should the agreement be cancelled, The Association may be subject to cancellation fees contingent on the ability of the rooms to be resold.

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NOTE 6––Temporarily Restricted

Net Assets As of January 31, 2012, net assets are temporarily restricted for the following purposes: Research awards $ 7,117,165 Other programs 1,375,160 $ 8,492,325

NOTE 7––Permanently Restricted

Net Assets Permanently restricted net assets includes the beneficial interests in two trusts that The Association does not administer. The investments of each trust are administered by a trustee, who is independent of The Association, and distributions are made to The Association in accordance with the trust agreement for each trust. The beneficial interests in these trusts approximated $657,000 and $627,000 at January 31, 2012 and 2011, respectively.

Permanently restricted net assets also includes research endowment principal of approximately $240,000, which is held in perpetuity to generate earnings to support research expenditures.

NOTE 8––Employee Benefit Plan The Association maintains a 401(k) defined contribution plan, which is subject to limitations set forth by the Internal Revenue Code. The plan covers all employees who meet the requirements of the plan. The total expenses relating to the plan were $110,755 and $102,125 for the years ended January 31, 2012 and 2011, respectively.

NOTE 9––Fair Value Measurements The Association uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine the fair value disclosures. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for The Association’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. The Association groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets

and liabilities are traded and the reliability of the assumptions used to determine fair value.

The three levels of the fair value hierarchy are as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that The Association has the ability to access at the measurement date.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observ- able for the asset or liability, either directly or indirectly.

• Level 3 inputs are unobservable inputs for the asset or liability.

The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

The following table presents assets and liabilities that are measured at fair value on a recurring basis at January 31, 2012:

FAIR VALUE MEASUREMENTS AT JANUARY 31, 2012 LEVEL 1 LEVEL 2 LEVEL 3 TOTAL

ASSETS

Investments in marketable securities $ 4,652,480 $ 2,071,940 $ 6,724,420 Beneficial interest in perpetual trusts $ 939,667 939,667 Contributions receivable from 291,389 291,389 charitable remainder trusts LIABILITIES Annuity payment liability ( 754,538) ( 754,538) $ 4,652,480

$ 2,071,940

$ 476,518

$ 7,200,938

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CORPORATE PARTNERSHIPS

FYE 2012 TOTAL CORPORATE CONTRIBUTIONS $100,000+

Up to $10,000

Permobil, Inc.

ALSCare

Sanofi Aventis U.S.

American Association for Homecare

Vitas Hospice Services, LLC

Baker Tilly Virchow Krause, LLP Biotechnology Industry Organization

$25,000 - $99,999

Biogen Idec Pharmaceutical Research and Manufacturing Association

$10,000 - $24,999

Amgen Foundation Merck & Co., Inc. Pfizer Inc.

Care Fusion Charity Dynamics Clark Charitable Foundation, Inc. Electromed FLAVORx LC Technologies, Inc. Philips Respironics Prentke Romich Co. Pride Mobility Products Corp.

Tobii Assistive Technology, Inc. United Hayek/PSHS, Inc.

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LEADERSHIP

TRUSTEES AND EXECUTIVES Lawrence R. Barnett The ALS Association, Chairman Emeritus The Honorable Jay Daugherty* The ALS Association Chairman Shaffer Lombardo Shurin Kansas City, Missouri Robin R. Ganzert, Ph.D.* The ALS Association Vice Chair President American Humane Association Washington, D.C. Benjamin S. Ohrenstein, Esq., CPA* The ALS Association Treasurer (until May 2011) Haverford, Pennsylvania Luis Leon* The ALS Association Treasurer (from May 2011) Retired Executive Vice President Royal Caribbean Cruises, Ltd. Miami, Florida Laural Winston* The ALS Association Secretary (until May 2011) Retired Chief Financial Officer TECHMER PM Palm Desert, California

William Thoet* The ALS Association Secretary (from May 2011) Senior Vice President Booz Allen Hamilton McLean, Virginia Robert V. Abendroth, Esq.* Whyte Hirschboeck Dudek S.C. Milwaukee, Wisconsin Lawrence R. Barnett, Esq.* Gipson, Hoffman & Pancione Los Angeles, California Andrew T. Brophy Brophy Properties, Inc. Washington, D.C. Phyllis R. Brourman, Esq. Beverly Hills, California Doug Butcher Vice President Industrial Properties CBRE/Louisville Louisville, Kentucky Daniel de Grandpre Chief Executive Officer dealnews.com Madison, Alabama Cynthia D. Douthat Atlanta, Georgia

Andrew Fleeson Alan R. Griffith Centreville, Maryland

Elizabeth Heller Rosenberg* Director Haworth Library New York, New York

Wilson N. Krahnke* Chevy Chase, Maryland

Howard B. Safenowitz, Esq. Calabasas, California

William G. Matthews Retired Vice President, Sales 3M St. Paul, Minnesota

Stephen H. Saltzman* North Bergen, New Jersey

Edmund G. McCurtain, II* Boulder Creek, California Timothy O’Toole Chief Executive Officer Vitas Healthcare Corporation Miami, Florida

William D. Soffel President Vacation Properties Realty, Inc. Chautauqua, New York Allan J. Tobin, Ph.D. Los Angeles, California

Ellyn C. Phillips* Chair The ALS Association Greater Philadelphia Chapter Ambler, Pennsylvania Jonathan Roberts Executive Vice President, Rx Purchasing, Pricing and Network Relations CVS Caremark Lincoln, Rhode Island *Executive Committee Members

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LEADERSHIP

CHAIRMAN’S COUNCIL

NATIONAL OFFICE EXECUTIVE STAFF

Robert J. Bjorseth Tech Inc. Lenexa, Kansas

Jane H. Gilbert President and Chief Executive Officer

Richard P. Essey Chairman TemPositions San Francisco, California Allen L. Finkelstein, Esq. Pavia & Harcourt New York, New York Lawrence A. Rand Senior Vice President Kekst and Company New York, New York

Dan Reznikov Chief Financial Officer Lucie Bruijn, Ph.D. Chief Scientist Stevan Gibson Chief Public Policy Officer Gordon Lavigne Chief Development Officer Kimberly Maginnis Chief Care Services Officer Ken Nicholls Chief Chapter Relations Officer

20

THE ALS ASSOCIATION alsa.org 1275 K STREET NW SUITE 1050 WASHINGTON DC 20005 PHONE 202 407 8580