Report from the Society Committee on Budget & Finance August 23, 2017 Washington, DC www.acs.org/CouncilReports

2017 Probable 1 Projection Highlights Governning Board for Publishing 8/6/2018 2017 Probable 1 Projection Highlights Net from Operations – $25.3M $2.1M favorable to Budget $1.6M (6.7%) higher than 2016 Total Revenues – $553.0M $2.4M (-0.4%) unfavorable to Budget $26.2M (5.0%) higher than 2016 Total Expenses – $527.6M $4.5M (0.8%) favorable to Budget $24.7M (4.9%) higher than 2016 To summarize, the 2016 Probable 1 projects a net from operations of $17.3M which is almost $4.0M (actually $3.9M) higher than the Approved Net from Operations ($13.4M); and $723,000 higher than where the Society ended 2015 ($16.6M). Revenues are projected to be essentially on budget at $528.8M, which is +3.3% higher than 2015. If we adjust for foreign currency, top line revenue growth would actually be closer to +4.5% (1.2% or $6.1M adverse effect). FX headwinds adversely impact CAS – more on this later in the meeting from Manny and Jay in the CAS report. Expenses are projected to be $3.0M favorable to budget which is, coincidently, also +3.3% higher than 2015 actuals. <CLICK> Note: Excludes the ACS Petroleum Research Fund and the Member Insurance Program. Proprietary and Confidential

2017 Probable 1 Projection Net from Operations ($ in Millions) Information Services Investments Net Dues All Other Web Strategy & Operations Scientific Advancement We’ll now transition to a Division or Programmatic summary of the 2017 Probable 1 Projection. This slide is a traditional Sources and Uses chart that captures the Society’s major sources of net contribution…purple bars at the top pointing to the right; and net expense – shown here in several colors pointing to the left, showing where those resources are deployed. What remains at the bottom of the chart and is circled is the projected $25.3M Net from Operations. [CLICK] Education Membership Net From Operations Note: All Other includes the Development Office and Unallocated Indirect Costs. Net from Operations excludes the Member Insurance Program and the ACS Petroleum Research Fund. 3

3-year rolling average of free cash flow > 0 Financial Guidelines Guidelines Targets 2017 Probable 1 Current Ratio 0.65x target Debt Ratio 50% maximum 3-year rolling average of free cash flow > 0 Free Cash Flow The one guideline we are close to finally is the Fund Balance Ratio. This is a measure of the adequacy of Unrestricted Net Assets (defined as UNA/Operating Expenses). We’ve been out of compliance since 2008. ACS ended 2016 with UNA of $207 million and a Fund Balance Ratio of 39%; and as you’ll see on a later slide, as of July 31, 2017, UNA has increased since YE 2016. [CLICK] 2.5% - 5.0% ROR target Sustainability Fund Balance Ratio 50% minimum American Chemical Society

2018 Program Funding Requests ACS Online Course on Laboratory Safety 2018 Proposed Budget - $12,000 2019 Forecast Budget - $12,000 2020 Forecast Budget - $12,000 New Faculty Workshop Series 2018 Proposed Budget - $71,000 2019 Forecast Budget - $154,000 2020 Forecast Budget - $164,000 Note: Net expenses are before indirect assessments. 5 5