System Financial Health Round Robin Meetings

I.Revenue & Expense Trends II.Employment Profile III.Audience-based Revenue IV.CSG and PBS Dues History OUTLINE FOR SYSTEM FINANCIAL HEALTH SECTION

TOTAL SYSTEM REVENUES HAVE GROWN SLOWLY AND DECLINED RECENTLY Public Television Revenues, $ Billions Source: AFR Total Revenue Annual Growth Rate, 97-02: 5.9%* * Compound Annual Growth Rate. Total Revenue Annual Growth Rate, 02-05: -2.8%*

THOUGH CAPITAL FUNDS HAVE GROWN AT A FAST RATE, THEY HAVE PLAYED A SMALL ROLE IN TOTAL REVENUES Public Television Revenues and Capital Funds Contributions, $ Millions Source: AFR Capital Funds 7.5 % Annual Growth Rate* Non-operational Operational Capital Funds *Growth rate from ’99-’05

5.5% MEMBERSHIP, BUSINESS & STATE FUNDING HAVE ALL GROWN SLOWLY Source: AFR Total Operational Revenues, 1997 and 2005 $ Millions Membership/Fundraising Major Giving/Endowment** Foundation Businesses Local/State 1.3% 33.0% 1.4% 1.0% $1409 $1585 Growth Rate* Total Operational Revenues 1.5% * Inflation in this same period is 2.3% annually ** Major giving growth rate is Federal 5.8% Other -6.4% University -0.2%

TOTAL FEDERAL FUNDING IS THE LARGEST SOURCE OF REVENUE THAT IS GROWING IN REAL DOLLARS Source: AFR Total System Revenues Indexed to 2005 CPI, 1997 and 2005 $ Millions $1714 Growth Rate * Major giving growth rate is $ % Membership/Fundraising Major Giving/Endowment* Foundation Businesses Local/State -1.2% 29.0% -1.1% -1.4% Total Operational Revenues -1.0% Federal 3.2% Other -8.7% University -2.6%

% of Total System Revenue that is CSG Funding, 1997 – 2005 Source: AFR, CPB CSG FUNDING HAS ALSO BECOME AN INCREASINGLY IMPORTANT REVENUE SOURCE FOR STATIONS $270 $250 $250 $300 $340 $350 $363 $378 $387 Total CPB Appropriation (in millions) after any rescissions Appropriations (in millions) before rescission: 2003: $365; 2004: $380; 2005: $390

THOUGH REVENUE HAS DECREASED RECENTLY, EXPENSES REMAIN FLAT Total System Expenses vs. Total System Revenues, 1997 – 2005 $ Billions Total System Expenses Total System Revenue Source: AFR

THE MIX OF EXPENSES OVER TIME HAS STAYED CONSTANT DESPITE SHIFTING OPERATING AND ECONOMIC CONDITIONS Source: AFR Percent Station Expenses, 1990 to 2005 Membership & Underwriting Management & General Program Information & Promotion Broadcasting Programming & Production

EMPLOYMENT LEVELS HAVE RETURNED TO 1990s LEVELS Public Television Full-time Employment, Source: AFR, SABS

Source: SABS EMPLOYEES ARE CONCENTRATED IN PRODUCTION AND CONTENT, DELIVERY & DISTRIBUTION (CD&D) FTEs per Functional Area, Corp. Mgt & Support Develop- ment Auction Under- writing Program- ming Production CD&D Education & Outreach Marketing/ CRM

VIEWER AND DONOR NUMBERS ARE DECLINING AT THE SAME RATE Source: SABS

‘Cost per Dollar’ depictions exclude any allocated costs from the Corporate Management and Support, and other station areas. FUNDRAISING COSTS IN THE SYSTEM GREW SLIGHTLY FROM 2004 TO Source: SABS Membership (gifts < $1K) Major Giving (gifts ≥ $1K) Planned Giving (realized) Spot/Run of Scheduling Underwriting Auction Average Fundraising Cost per Dollar Raised,

DESPITE CHALLENGES, PUBLIC TELEVISION HAS SEEN POSITIVE REVENUE GROWTH IN SEVERAL AREAS Foundation  Up 3% in real dollars (’97-’05) Major Giving  Up 29% in real dollars (’99-’05) Underwriting  Up slightly over the past three years to $233.4 million from $230.5 million Membership Giving  Average membership gift increase to $95/member in 2005 from $92/member in 2004

SYSTEMWIDE, CSG FUNDING EXCEEDES PBS DUES CSG Grant PBS Dues* *PBS dues are NPS and MSA dues only Source: CPB, PBS System-wide CSG Grant and PBS Dues*, 1997 – 2007 $ millions