Report from the Society Committee on Budget & Finance September 11, 2013 Indianapolis, IN www.acs.org/CouncilReports

Budget & Finance Committee 2013 Probable Year-End Projection Net from Operations - $14.5M $1.3M Favorable Total Revenues - $491.8M $7.6M (-1.5%) Unfavorable Total Expenses - $477.2M $8.9M (1.8%) Favorable Board Financial Guidelines Compliance with four of five guidelines anticipated

3-year rolling average of free cash flow > 0 Financial Guidelines Guideline Target 2013 Probable 1 Current Ratio 0.65x target Debt Ratio 50% maximum 3-year rolling average of free cash flow > 0 This slide summarizes how the Society is projected to end the year in terms of compliance with the five Board-approved financial guidelines. Rather than provide specific calculated amounts for each guideline…which is difficult to do at this point in the year…we’ve moved to a simple color-coded system for the P1 Projection – green, yellow and red. The green dot indicates we anticipate full compliance with the target… yellow means compliance is at risk; and red indicates we expect to violate the guideline. As you can see, we expect to satisfy the first four guidelines, Current Ratio; Debt Ratio; Free Cash Flow; and Sustainability. The one guideline where we are not anticipating compliance is the Fund Balance Guideline….which is a measure of the adequacy of the Society’s Unrestricted Net Assets. ACS ended 2012 with UNA of $101 million and a Fund Balance Ratio of 21%. As you’ve seen on the previous slide, as of July 31, 2013, UNA is up to $186 million which equates to a Fund Balance Ratio of 38%, but still below the 50% Minimum. We would need to reach ~$245 million in UNA by December 31 to comply with the guideline. It’s certainly possible…but we think unlikely. [CLICK] Free Cash Flow 2.5% - 5.0% ROR target Sustainability Fund Balance Ratio 50% minimum American Chemical Society

Unrestricted Net Assets 2009 – 2012 Actuals; est Unrestricted Net Assets 2009 – 2012 Actuals; est. at July 31, 2013 ($ in Millions) Net from Operations – P1 $ 14.5M Investment Gains 15.0M PRBP Changes 55.3M Net Increase $ 84.9M This slide shows the recent trend in UNA. For 2013, we’ve brought together in the blue call out box the three factors that I’ve just covered -- Projected Net from Operations (+$14.5M); investment gains (+$15.0M); and a reversal of Postretirement Benefit Plan (PRBP) charges from previous years (+$55.3M). These total $84.9M million raising unrestricted assets from $101 million at YE 2012 to approximately $186M at July 31. (Note: at August 31 = ~$180M). (click) Note: Excludes the Member Insurance Program and the ACS Petroleum Research Fund. 4 American Chemical Society

Budget & Finance Committee Program Funding Requests ACS Entrepreneurial Initiative National Association of Chemistry Teachers ACS International Center (Reauthorization) SciMind (Reauthorization) 5 5

Program Funding Requests Net Expenses 6