1. 1 TCF Volunteers Conference BG Thomas J. Elzey Executive Vice President, Finance, Administration and Operations 25 February 2012

2. Financial status of The Citadel Despite a 47% cut in State appropriations, The Citadel has operated under sound fiscal management for the period of 2005 – 2011 Financial performance is expected to be solid for FY 2012 Moody’s Investors Service affirmed The Citadel’s Aa3 rating with a stable outlook 2

3. Securing Future Financial Sustainability Stabilize state funding Determine schools or programs most attractive for expansion Determine the full cost of programs Calculate “break even” enrollment for programs given current and future trends, and identify where internal capacity needs to increase Implement the “New Financial Model” recommendations of the Boston Consulting Group (BCG) 3

4. 4 Engagement of The Boston Consulting Group In March 2011, The Citadel engaged the Boston Consulting Group (BCG) to: Validate financial projections Provide a modeling tool to plan and analyze fiscal health Provide recommendations to strengthen financial posture and stability

5. Review of BCG overview and findings The BCG recommendations are the “cornerstone” for the “New Financial Model” for The Citadel BCG identified opportunities to increase revenue and secure financial sustainability: o Increase Corps retention o Grow The Citadel Graduate College (CGC) o Grow Veterans Programs o Optimize fundraising 5

6. Specific BCG recommendations to secure financial sustainability 6 Opportunities RetentionExpand Citadel Success Institute Enhance academic counseling Rebalance companies AthleticsIncrease self-sufficiency from 42% to 60% Program growthIncrease Evening Undergraduate enrollment Increase Graduate College enrollment Tuition and feesIncrease out-of-state tuition Repurpose scholarship support On-line programsExpand offerings to current students Assess opportunities for larger presence

7. 7 TCF Grant: $3.6 million to implement BCG recommendations Represents the first year’s investment on a multi-year plan to assist The Citadel in implementing the BCG recommendations to reach financial sustainability Assists in addressing critical deferred maintenance projects FY 2012 Tasks are on track Performance indicators have been identified Reports given to BOV and TCF

8. 8 Focus on the Future Need for continued partnership and support for implementing strategic opportunities and capital improvements Monitor and contain cost, improve efficiency, and productivity Continue to implement the “New Financial Model” Reduce the backlog of deferred maintenance

9. 9 Questions?