69th General Service Conference

69th General Service Conference
AROUND THE PICNIC TABLE Finance 2019 GSC Slide 0 – Good afternoon. My name is David Morris and I am a Class A trustee and treasurer of the General Service Board. It is again my privilege to deliver this year’s Treasurer's report to the 69th General Service Conference of Alcoholics Anonymous or, as it is more commonly referred to, “Finance around the Picnic Table,” the phrase coined at the 59th Conference. This phrase means that much of the finance discussion during Conference is "preaching to the choir." As always, what we need is better communications about what finance really means when members talk about the “numbers” around the euphemistic picnic table before and after meetings. Clear communication is the key. Although our finances continue to grow ever more complex, remember that Corporate Poverty is more a state of mind, rather than the size of our bank account. “Too much – and we argue over perilous wealth and lose sight of our primary purpose of carrying the message. Too little – and we risk losing the ability to carry the message at all.” David M. Morris, C.P.A. Class A (nonalcoholic) Trustee General Service Board Treasurer

2018 FINANCIAL HIGHLIGHTS 69th General Service Conference 7th Tradition of Self-Support – $8.4 million, almost equal to 2017 record Cost of Services Provided to Fellowship – $11.4 million, up 11.8% from 2017 Shortfall between 7th Tradition of Self-Support and Cost of Services Provided to the Fellowship – $3.0 million AAWS publishing profits – $3.4 million, down 4%, used to cover shortfall between 7th Tradition and Cost of Services, resulting in net GSO profit – $0.4 million Grapevine subscription levels declined in GV would have essentially broken even, if not for severance payments General Fund support of La Viña service activity – $148 thousand Reserve Fund – $15.9 million, resulting in ratio of 9.7 months Slide 1 – lists the key financial highlights from our 2018 operating results: 7th Tradition of self-support contributions were $8,385,009, down 0.3% from 2017 Cost of services provided to the Fellowship were $11,426,835, up $1,204,185, or 11.8%, from 2017 Shortfall between our 7th Tradition and cost of services provided was $3,041,826, or 73.4%, compared to $1,813,178, or 82.3%, in 2017 AAWS publishing profit of $3,436,507 covered shortfall between our 7th Tradition and cost of services, resulting in a profit of $394,681 Grapevine subscription levels declined in GV had a loss of $149,167, primarily due to severance payments. General Fund support of La Viña service activity was $148,467, compared to $126,440 in 2017 Reserve Fund was $15,935,331, resulting in a ratio of 9.7 months, compared to 9.5 months in 2017.

2018 FINANCIAL HIGHLIGHTS Amounts in $ 2018 ACTUAL 2018 BUDGET COMPARED TO 2018 BUDGET 2017 COMPARED TO 2017 ACTUAL GENERAL SERVICE OFFICE 7th Tradition Contributions 8.4 M 8.2 M 0.2 M (2%) increase Essentially equal Cost of Services Provided to Fellowship 11.4 M 10.9 M 0.4 M (4%) increase 10.2 M 1.2 M (12%) increase Shortfall between 7th Tradition & Cost of Services 3.0 M 2.7 M 0.3 M (7%) increase 1.8 M 1.2 M (61%) increase Literature Profits 3.4 M 3.2 M 0.2 M (6%) increase 3.6 M 0.2 M (6%) decrease Net Income 0.4 M 0.5 M 0.1 M ( 20%) decrease 1.4 M (78%) decrease GRAPEVINE & LA VINA Average Circulation 72,300 68,102 1,126 (17%) better 75,329 3,029 (4%) decrease Net Income (Loss) (149 K) (271 K) 107 K (39%) better 126 K 275 K (218%) decrease General Fund support of La Viña service activity 148 K 146 K 2 K increase 22 K (17%) increase RESERVE FUND Coverage Ratio 9.7 months 9.7 months Equal to budget 9.5 Increase of 0.2 (2%) months M – millions; K – thousands Slide 1 – Support 1 – is the same financial highlights as Slide 1, except in a tabular format. 7th Tradition of self-support contributions were $8,385,009, down 0.3% from 2017 Cost of services provided to the Fellowship were $11,426,835, up $1,204,185, or 11.8%, from 2017 Shortfall between our 7th Tradition and cost of services provided was $3,041,826, or 73.4%, compared to $1,813,178, or 82.3%, in 2017 AAWS publishing profit of $3,436,507 covered shortfall between our 7th Tradition and cost of services. resulting in a profit of $394,681 Grapevine subscription levels declined in GV had a loss of $149,167, primarily due to severance payments. General Fund support of La Viña service activity was $148,467, compared to $126,440 in 2017 Reserve Fund was $15,935,331, resulting in a ratio of 9.7 months, compared to 9.5 months in 2017.

2018 HIGHLIGHTS 28,314 Groups made $6.7 millions of 7th Tradition contributions Represents 41.3% of total groups $ average group contribution 61% of 28,314 groups have consistently supported GSO during last 6 years 5,169 Individuals made $819,000 of 7th Tradition contributions 63% of contributions received through on-line contribution system $ average individual contribution $11.4 million - Cost of Services provided to Fellowship 25% for Outreach Activities 19% for Service Leadership 19% for Group Services 73.4% of cost of services supported by 7th Tradition contributions 902,004 Big Books sold, of which 83% were to A.A. groups, individuals, central offices, intergroups Slide 2 – lists 2018 highlights. 28,314 groups made $6,720,287 of 7th Tradition contributions (Slide 7). This represented 41.3% of 68,478 total groups (Slide 18). The average group contribution was $ (Slide 8). Nearly 61% of the 28,314 groups have supported GSO consistently during the last 6 years (Slide 9). 5,169 individuals made totaling $819,280 of 7th Tradition contributions (Slide 7). The average individual contribution was $ (Slide 10) % of these utilized our on-line contribution system (Slide 15). Slide 30 shows that the cost of services provided to the Fellowship of $11,426,835, broken down with 25% for Outreach Activities of $2,837,550; 19% for Service Leadership of $2,164,867; and 19% for Group Services of $2,235,265. This means that represents 73.4% of services supported by 7th Tradition (Slide 35). 902,004 Big Books were sold in 2018, with 82.7% to A.A. groups, individuals, central offices and intergroups (Slide 44).

NEW AUDITORS IN 2018 Auditors changed to Mark Paneth With this change, we also changed to “Limited Review” procedures for our quarterly results, versus prior “Compilation” procedures “Limited Review” provides the Boards and Fellowship with a higher level of assurance that the quarterly results are accurate Limited Review is not an audit, so the level of assurance is less than audit, but more than a compilation Audited 2018 financial statements reflect new accounting presentation standards changing our income and functional expense statements, creating significant differences between the two. Slide 2 – Support 1 – As previously announced at the 68th General Service Conference, we retained the auditing and accounting firm of Marks Paneth LLP to became our independent auditors, replacing Owen J. Flanagan & Company, LLP. As part of that change, we further decided to upgrade the level of audit assurance work being conducted for each quarterly review of our financial results from a compilation review to a “limited review.” Under generally accepted auditing and assurance standards, a “limited review” report will provide the General Service Board with a higher level of assurance than a “compilation report” as to the quality of the financial information being produced each quarter by management. This change has no effect on the annual audit of our financial statements and the level of assurance that we obtained from an audit. Also, our audited 2018 financial statements reflect the required adoption of new accounting presentation standards, changing our income and functional expense statements, creating significant differences between the two.

COMMUNICATING TO THE FELLOWSHIP ABOUT FINANCE
69th General Service Conference Spiritual Value of 7th Tradition Self-Support Slides 5 – 21 Services Provided to the Fellowship Slides 22 – 39 Publishing Activities Slides 40 – 48 Grapevine and La Viña Slides 49 – 54 Pension & Postretirement Medical Plans Slides 55 – 58 Reserve Fund Slides 59 – 61 2019 Budgets Slides 62 – 63 2020 International Convention Slides 64 Slide 3 – is our agenda for today’s Finance presentation. Like last year, this Finance presentation is composed of: Presentation One is called “Finance Light,” which has 67 slides made up of only charts and graphs for those of you who are overwhelmed by numbers and want visually simpler slides to understand and then to use in your areas and groups, Presentation Two is called “Finance Complete,” which integrates the 67 slides from “Finance Light,” into an additional 73 slides that have the detailed numbers, which support the “Finance Light” charts and graphs. All of the “Finance Light” slides are colored a light blue so they standout from the more detailed slides in “Finance Complete.” The idea is that you simple pull out the “Finance Light” slides out of “Finance Complete” for delivery to your areas. However, if you or others seek more details, you have them. Today, I will ONLY present “Finance Light.”

SUMMARY OF ACTIVITY* – 2018 69th General Service Conference $ - in Thousands GSO Publishing Grapevine La Viña 2018 2017 REVENUE Net Sales 14,020 2,813 141 16,974 16,656 Contributions 8,385 8,409 Interest 31 20 TOTAL REVENUE 2,844 25,390 25,085 EXPENSES Cost of Goods Sold 4,567 929 60 5,556 5,267 Operating (Program & Supporting) Expenses 11,427 6,016 2,064 229 19,736 18,059 TOTAL EXPENSES 10,583 2,993 289 25,292 23,326 NET INCOME (LOSS) (3,042) 3,437 (149) (148) 98 1,759 RESERVE FUND at December 31 15,935 14,353 Operating Expenses Number of months coverage 9.7 9.5 * - Excludes Nonoperating Funds – Reserve, Capital Projects, Pension, Postretirement Medical Benefits Slide 4 – is the income statement of each of the operating entities for Ten (10) key amounts are highlighted in yellow: Finance Light Finance Complete 7th Tradition Contributions – $8,385,009 Slide 7 Slide 7 – Support 1 Recurring Operating Expenses – $19,736,206 Slide 24 Slide 24 – Support 1 GSO Service Expenses – $11,426,835 Slide 30 Slide 30 – Support 1 GSO Shortfall – $3,041,826 Slide 35 Slide 36 – Support 1 AAWS Net Sales – $14,020,149 Slide 41 Slide 41 – Support 1 AAWS Net Income – $3,436,507 Slide 41 Slide 41 – Support 1 Grapevine Net Loss – $149,167 Slide 51 Slide 51 – Support 1 General Fund Support – La Viña – $148,467 Slide 54 Slide 54 Reserve Fund – $15,935,331 Slide 60 Slide 60 – Support 1 Coverage Ratio – 9.7 months Slide 60 Slide 60 – Support 1

GRATITUDE Slide 5 – introduces our first topic of the 7th Tradition of Self-Support. 7TH TRADITION

7TH TRADITION – 2018 – $8.4 MILLION
69th General Service Conference 28,314 GROUPS - $6,720,287 5,169 INDIVIDUALS - $819,280 TOTAL 7TH TRADITION $8,385,009 NEAR RECORD 7TH TRADITON Slide 6 – highlights of the 7th Tradition of self-support in First, 28,314 Groups contributed a $6,720,287, a decrease of 805 groups, or 2.8%, and $39,328, or 0.6%, from 2017, which had 29,219 Groups contributing $6,759,615. Second, 5,169 individuals contributed a record $819,280, up $10,481, or 1.3%, compared to the 6,088 individuals, who contributed $808,799 in Third, total contributions from all sources were $8,385,009 in 2018, down $24,443, or 0.3%, from $8,409,452 in See Slide 7 – Support 1 and Slide 7 – Support 2 for details. Actual 2018 contributions were 2.3% greater than the budget of $8,200,000.

7TH TRADITION SELF-SUPPORT – 2018
69th General Service Conference 7TH TRADITION SELF-SUPPORT – 2018 Slide 7 – lists the sources from whom we received 7th Tradition contributions, showing both the dollar amount and the unique number of contributors. In 2018, total contributions were $8,385,009 with 82,229 contributions received and processed from 34,524 unique contributors. The left pie chart shows the relative dollar significance of each source of our 7th Tradition: - Groups contributed $6,720,287, or 80.1% (2017 – $6,759,615 or 80.4%), - A.A. Entities NOT Groups (e.g., conferences, areas, intergroups) contributed $636,092, or 7.6% (2017 – $660,493 or 7.9%), - Individuals contributed $819,280, or 9.8% (2017 – $808,799 or 9.6%). The right pie chart shows the number of unique contributors: Groups – 28,314, or 82.0%; A.A. Entities NOT Groups – 721, or 2.1%; Individuals – 5,169, or 15.0%. See Slide 7 – Support 1 and Slide 7 – Support 2 for details.

7TH TRADITION SELF-SUPPORT DETAIL – 2018 TOTAL CONTRIBUTION IN DOLLARS PERCENTAGE OF TOTAL TOTAL TRANSACTIONS PROCESSED PERCENTAGE OF TOTAL TOTAL UNIQUE CONTRIBUTORS Groups – Slide 8 & 9 $6,720,287 80.1 70,816 86.1 28,314 82.0 A.A. Entities NOT Groups 636,092 7.6 891 1.1 721 2.1 Individuals – Slide 10 & 11 819,280 9.8 10,171 12.4 5,169 15.0 Memorials 96,811 1.2 187 0.2 183 0.5 Foreign 24,309 0.3 82 0.1 59 Special Meetings 11,043 67 65 Hospitals 202 0.0 2 Loners 189 10 8 Intl. Lawyers in A.A. 1,000 1 Prisons 106 Sub-total 8,309,319 99.1 82,229 100.0 34,524 Intl. Literature Fund - Slide 7 – S 5 75,690 0.9 Total 8,385,009 Slide 7 – Support 1 – lists the sources from whom we received 7th Tradition contributions, showing the dollar amount, the number of contributions received and processed, and the unique number of contributors. In 2018, total contributions were $8,385,009 with 82,229 contributions received and processed from 34,524 unique contributors. - Groups contributed $6,720,287, or 80.1% (2017 – $6,759,615, or 80.4%), - A.A. Entities NOT Groups (e.g., conferences, areas, intergroups) contributed $636,092, or 7.6% (2017 – $660,493, or 7.9%), - Individuals contributed $819,280, or 9.8% (2017 – $808,799, or 9.6%). The table also shows the number of unique contributors: Groups – 28,314, or 82.0%; A.A. Entities NOT Groups – 721, or 2.1%; Individuals – 5,169, or 15.0%. See Slide 7 – Support 2 for prior years. See Slide 7 – Support 5 for International Literature Fund.

7TH TRADITION SELF-SUPPORT – 3 YEAR HISTORY 2018 PERCENTAGE OF TOTAL DOLLARS 2017 2016 Groups Slide 8 6,720,287 80.1 6,759,615 80.4 6,456,174 81.4 A.A. Entities NOT Groups2 636,092 7.6 660,493 7.9 668,423 8.4 Individuals Slide 10 819,280 9.8 808,799 9.6 608,582 7.7 Memorials 96,811 1.2 61,385 0.7 92,410 Foreign 24,309 0.3 16,001 0.2 19,555 Special meetings4 11,043 0.1 19,792 18,064 Other 1,497 - 13,312 8,776 Sub-total 8,309,319 99.1 8,339,397 99.2 7,871,984 International Literature Fund5 75,690 0.9 70,055 0.8 62,885 Total 8,385,009 100.0 8,409,452 7,934,869 ¹ Includes individuals who contribute utilizing the online system and who specifically identify that their contribution is being made on behalf of their Group. 2 Special contribution is one that comes from any number of A.A. entities that are NOT an A.A. Group, for example, a Conference, a Committee, an Area, a District, an Intergroup, etc. 3 Contribution from an individual who does not designate a Group. 4 A Special Meeting is a meeting that does not want to be a group, but does want to contribute to the General Service Board. 5 See Slide 7 – Support 5 for ILF contributions since 2002. Slide 7 – Support 2 – lists the sources of contributions received in 2018 totaling $8,385,009 compared to $8,409,452 in 2017 and $7,934,869 in The actual number of contributions received and processed in 2018 was 82,229 (Slide 7 – Support 1), down from 85,316 (Slide 7 – S 4) received in 2017 and 82,600 received in The 2018 percentages of 80.1%, 7.6% and 9.8% are highlighted in yellow and are the source of the amounts on the Slide 7. 7 – S 2

7TH TRADITION SELF-SUPPORT – 2017
69th General Service Conference 7TH TRADITION SELF-SUPPORT – 2017 Slide 7 – Support 3 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. It lists the sources from whom we received 7th Tradition contributions, showing the dollar amount and the unique number of contributors. In 2017, total contributions were $8,409,452 with 85,316 contributions received and processed from 36,407 unique contributors. The left pie chart shows the dollar significance of each source of our 7th Tradition, with Groups contributing $6,759,615, or 80.4%, A.A. Entities NOT Groups (e.g., conferences, areas, intergroups) contributing $660,493, or 7.9%, and Individuals contributing $808,799, or 9.6%. In addition, the right pie chart shows the number of unique contributors: Groups – 29,219, or 80.3%; A.A. Entities NOT Groups – 786, or 2.2%; Individuals – 6,088, or 16.7%. See Slide 7 – Support 4 for details.

7TH TRADITION SELF-SUPPORT DETAIL – 2017 TOTAL CONTRIBUTION IN DOLLARS PERCENTAGE OF TOTAL TOTAL TRANSACTIONS PROCESSED PERCENTAGE OF TOTAL TOTAL UNIQUE CONTRIBUTORS Groups – Slide 8 & 9 $6,759,615 80.4 73,496 86.1 29,219 80.3 A.A. Entities NOT Groups 660,493 7.9 984 1.2 786 2.2 Individuals – Slide 10 & 11 808,799 9.6 10,503 12.3 6,088 16.7 Memorials 61,385 0.7 145 0.2 134 0.4 Foreign 16,001 34 0.0 33 0.1 Special Meetings 19,792 133 127 0.3 Hospital 12,821 6 Loner 362 11 10 Intl. Lawyers in A.A. 100 1 Prison 30 3 Sub-total 8,339,397 99.2 85,316 100.0 36,407 Intl. Literature Fund - Slide 7 – S 5 70,055 0.8 Total 8,409,452 Slide 7 – Support 4 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. It lists the sources from whom we received 7th Tradition contributions, showing the dollar amount, the number of contributions received and processed, and the unique number of contributors. In 2017, total contributions were $8,409,452 with 85,316 contributions received and processed from 36,407 unique contributors. Groups contributed $6,759,615, or 80.4%, A.A. Entities NOT Groups (e.g., conferences, areas, intergroups) contributed $660,493, or 7.9%, and Individuals contributed $808,799, or 9. 6%. The table show the number of unique contributors: Groups – 29,219, or 80.3%; A.A. Entities NOT Groups – 786, or 2.2%; Individuals – 6,088, or 16.7%. See Slide 7 – Support 2 for prior years. See Slide 7 – Support 5 for International Literature Fund.

INTERNATIONAL LITERATURE FUND CONTRIBUTIONS
69th General Service Conference INTERNATIONAL LITERATURE FUND CONTRIBUTIONS Slide 7 – Support 5 – lists the International Literature Fund contributions received since 2002 when GSO changed its reporting for 7th Tradition of self-support to include these amounts in conformity with generally accepted accounting principles. In 2018, $75,690 was received, compared to $70,055 in 2017.

GROUP CONTRIBUTIONS – 2018 Slide 8 – breaks down the 28,314 Groups totaling $6,720,287 received in 2018 into various dollar ranges. It shows that the majority of the 7th Tradition were small donations from a very large number of Groups. Specifically, 27,364 Groups, or 96.6%, of the 28,314 Groups contributed between $1 and $999, totaling $5,073,330, or 75.5%, of the $6,720,287. Over 50% of the Groups contributed between $100 to $499 totaling $3,127,284, or 46.5% of the $6,720,287. The average Group contribution was $ per group. See Slide 8 – Support 1 for details. AVERAGE GROUP CONTRIBUTION – $237.35

GROUP CONTRIBUTIONS – 2018 Dollar Range of Contributions Number of Contributing Groups per Each Range Percentage of Each Range to Total Number of Groups Total Dollar Contributions per Each Range Percentage of Each Range to Total Dollars of Groups Average Dollar Contribution per Group in Each Range $1 – 99 10,726 37.9 $537,129 8.0 $50.08 100 – 499 14,553 51.4 3,127,284 46.5 214.89 500 – 999 2,085 7.4 1,408,917 21.0 675.74 1,000 – 1,999 737 2.6 980,842 14.6 1,330.86 2,000 – 2,999 140 0.5 334,792 5.0 2,391.37 3,000 & Above 73 0.2 331,323 4.9 4,538.67 Total 28,314 100.0 6,720,287 237.35 Slide 8 – Support 1 – breaks down the 28,314 Groups totaling $6,720,287 received in 2018 into various dollar ranges. It shows that the majority of the 7th Tradition were small donations from a very large number of Groups. Specifically, 27,364 Groups, or 96.6%, of the 28,314 Groups contributed between $1 and $999, totaling $5,073,330, or 75.5%, of the $6,720,287. The 14,553 Groups between $100 to $499, or 51.4%, contributed $3,127,284, or 46.5% of the $6,720,287. The average Group contribution was $ per group.

GROUP CONTRIBUTIONS – 2017 Slide 8 – Support 2 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. The slide breaks down the 29,219 Groups totaling $6,759,615 into various dollar ranges received in It shows that the majority of the 7th Tradition were small donations from a very large number of Groups. Specifically, 28,256 Groups, or 96.7%, of the 29,219 Groups contributed between $1 and $999, totaling $5,082,072, or 75.2%, of the $6,759, Over 50% of the Groups contributed between $100 to $499 totaling $3,130,736, or 46.3% of the $6,759,615. The average Group contribution was $ per group. AVERAGE GROUP CONTRIBUTION – $231.34

PERCENTAGE OF GROUPS THAT HAVE CONSISTENTLY CONTRIBUTED DURING THE LAST SIX YEARS Slide 9 – is the first time that we have been able to provide this information. Due to the extraordinary hard work of our finance and contribution teams, we can now break down the 7th Tradition contributions between Groups that have consistently contributed during the last six years and Groups that have made less frequent contributions during the last six years. In 2018, 17,257 groups, or 60.1%, contributed $5,031,270 with each of these groups contributing some amount consistently during the last six years. There were 11,057 groups, or 39.1%, contributed $1,689,017 on a less frequent basis during the six years.

NUMBER OF GROUPS THAT HAVE CONSISTENTLY CONTRIBUTED DURING THE LAST SIX YEARS Slide 9 – Support 1 – is the first time that we have been able to provide this information. Due to the extraordinary hard work of our finance and contribution teams, we can now break down the 7th Tradition contributions between Groups that have consistently contributed during the last six years and Groups that have made less frequent contributions during the last six years. In 2018, 17,257 groups, or 60.1%, contributed $5,031,270 with each of these groups contributing some amount consistently during the last six years. There were 11,057 groups, or 39.1%, contributed $1,689,017 on a less frequent basis during the six years.

CONTRIBUTIONS FROM GROUPS THAT HAVE CONSISTENTLY CONTRIBUTED DURING THE LAST SIX YEARS Slide 9a – is the first time that we have been able to provide this information. Due to the extraordinary hard work of our finance and contribution teams, we can now break down the 7th Tradition contributions between Groups that have consistently contributed during the last six years and Groups that have made less frequent contributions during the last six years. In 2018, 17,257 groups, or 60.1%, contributed $5,031,270 with each of these groups contributing some amount consistently during the last six years. There were 11,057 groups, or 39.1%, contributed $1,689,017 on a less frequent basis during the six years. .

AVERAGE DOLLAR CONTRIBUTION FROM GROUPS THAT HAVE CONSISTENTLY CONTRIBUTED DURING THE LAST SIX YEARS Slide 9a – Support 1 – is the first time that we have been able to provide this information. Due to the extraordinary hard work of our finance and contribution teams, we can now break down the 7th Tradition contributions between Groups that have contributed during each of the last six years and those Groups that have made less frequent contributions during the last six years. In 2018, 28,314 groups contributed $6,720,287 for an average of $ per group (See Slide 8). 17,257 groups contributed $5,031,270 for an average of $ per group with each of these groups contributing some amount consistently during the last six years. 11,057 groups contributed $1,689,017 for an average of $ on a less frequent basis during the six years.

BIRTHDAY GIFTS FROM GROUPS – 2018
69th General Service Conference BIRTHDAY GIFTS FROM GROUPS – 2018 Slide 9b – shows that 3,921 birthday gifts, or 5.5%, totaling $217,302, or 3.2%, were received from Groups in Such gifts declined about 8.5% from 2017.

BIRTHDAY GIFTS FROM GROUPS – 2017
69th General Service Conference BIRTHDAY GIFTS FROM GROUPS – 2017 Slide 9b – Support 1 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. The slide shows that 4,529 birthday gifts, or 6.2%, totaling $239,657, or 3.5%, were received from Groups in 2017.

CONTRIBUTIONS FROM INDIVIDUALS – 2018
69th General Service Conference CONTRIBUTIONS FROM INDIVIDUALS – 2018 Slide 10 – breaks down the 5,169 contributions from Individuals totaling $819,280 received in 2018 into various dollar ranges. It shows that the majority of the 7th Tradition were small donations from a large number of Individuals % of the Individuals contributed between $1 to $499, totaling 40.2% of the dollars. The average contribution was $ per individual. See Slide 10 – Support 1 for details. The 5,169 people represent just 0.4% of the 1,418,177 membership. as of December 31, 2018. AVERAGE INDIVIDUAL CONTRIBUTION – $158.50

69th General Service Conference CONTRIBUTIONS FROM INDIVIDUALS – 2018 Dollar Range of Contributions Number of Individuals per Each Range Percentage of Each Range to Total Number of Individuals Total Dollar Contributions per Each Range Percentage of Each Range to Total Dollars of Individuals Average Dollar Contribution per Individual in Each Range $1 – 99 3,666 70.9 $116,667 14.2 $31.82 100 – 499 1,151 22.3 212,680 26.0 184.78 500 – 999 162 3.1 98,051 12.0 605.25 1,000 – 1,999 98 1.9 113,878 13.9 1,162.02 2,000 – 2,999 32 0.6 75,954 9.3 2,373.56 3,000 – 5,000 60 1.2 202,050 24.6 3,367.51 Total 5,169 100.0 819,280 158.50 Slide 10 – Support 1 – breaks down the 5,169 contributions from Individuals totaling $819,280 received in 2018 into various dollar ranges. It shows that the majority of the 7th Tradition were small donations from a large number of Individuals. Specifically, 93.2% of the Individuals contributed between $1 to $499, totaling 40.2% of the dollars. The average contribution was $ per individual. The 5,169 people represent just 0.4% of the 1,418,177 membership. as of December 31, 2018.

69th General Service Conference CONTRIBUTIONS FROM INDIVIDUALS – 2017 Slide 10 – Support 2 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. It shows that the majority of the 7th Tradition were small donations from a large number of Individuals. Specifically, 94.2% of the Individuals contributed between $1 to $499, totaling 42.1% of the dollars. The average contribution was $ per individual. AVERAGE INDIVIDUAL CONTRIBUTION – $132.85

BIRTHDAY GIFTS FROM INDIVIDUALS – 2018
69th General Service Conference BIRTHDAY GIFTS FROM INDIVIDUALS – 2018 Slide 11 – shows that 2,299 birthday gifts, or 22.6%, totaling $179,954, or 22.0%, were received from Individuals in Such gifts declined 9.3% from 2017.

GROWTH OF ON-LINE CONTRIBUTIONS 2010 – 2018 69th General Service Conference Slide 12 – shows the growth of on-line contributions since the system went live in June Since its inception, on-line contributions have grown from 1,063 contributions totaling $86,718, or 1.38%, in 2010 to 12,330 contributions totaling $880,311, or 10.59%, in 2018 of total contributions received. See Slide 13 for comparison of on-line contributions to total contributions.

BIRTHDAY GIFTS FROM INDIVIDUALS – 2017
69th General Service Conference BIRTHDAY GIFTS FROM INDIVIDUALS – 2017 Slide 11 – Support 1 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. It shows that 2,611 birthday gifts, or 24.9%, totaling $198,400, or 24.5%, were received from Individuals in There were a total of 10,503 Individual contributions, totaling $808,799 in 2017.

GROWTH OF ON-LINE CONTRIBUTIONS 2010 – 2018
69th General Service Conference GROWTH OF ON-LINE CONTRIBUTIONS 2010 – 2018 Slide 13 – shows the growth of on-line contributions from 1,063 contributions totaling $86,718 in 2010 to 12,330 contributions totaling $880,311 in The 2018 on-line numbers represents 15.0% of the total transactions and 10.6% of the total dollars received. The breakdown of the 12,330 on-line contributions totaling $880,311 is: - Groups made 5,835 on-line contributions totaling $442,948. See Slide 14 for on-line versus mail contributions from Groups. - Individuals made 6,435 on-line contributions totaling $423,789. See Slide 15 for on-line versus mail contributions from Individuals.

GROUPS ON-LINE VERSUS MAIL CONTRIBUTIONS – 2018
69th General Service Conference GROUPS ON-LINE VERSUS MAIL CONTRIBUTIONS – 2018 Slide 14 – shows that 5,835 on-line contributions, or 8.2%, totaling $442,948, or 6.6%, were received in There were a total of 70,816 Group contributions received and processed, totaling $6,720,287 in 2018.

GROUPS ON-LINE VERSUS MAIL CONTRIBUTIONS – 2017
69th General Service Conference GROUPS ON-LINE VERSUS MAIL CONTRIBUTIONS – 2017 Slide 14 – Support 1 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. It shows that 5,273 on-line contributions, or 7.2%, totaling $407,074, or 6.0%, were received in There were a total of 73,496 Group contributions received and processed, totaling $6,759,615.

INDIVIDUALS ON-LINE VERSUS MAIL CONTRIBUTIONS – 2018
69th General Service Conference INDIVIDUALS ON-LINE VERSUS MAIL CONTRIBUTIONS – 2018 Slide 15 – shows that 6,435 on-line contributions, or 63.3%, totaling $423,789, or 51.7%, were received in There were a total of 10,171 Individual contributions received and processed, totaling $819,280 in 2018.

INDIVIDUALS ON-LINE VERSUS MAIL CONTRIBUTIONS – 2017
69th General Service Conference INDIVIDUALS ON-LINE VERSUS MAIL CONTRIBUTIONS – 2017 Slide 15 – Support 1 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. It shows that 6,204 on-line contributions, or 59.1%, totaling $392,064, or 48.5%, were received in There were a total of 10,503 Individual contributions received and processed, totaling $808,799 in 2017.

$7.40 CHALLENGE CAMPAIGN – 2018 REGION NUMBER OF $7.40 CONTRIBUTIONS TOTAL NUMBER OF CONTRIBUTIONS PERCENTAGE OF TOTAL DOLLAR AMOUNT OF $7.40 CONTRIBUTIONS TOTAL $ AMOUNT CONTRIBUTIONS East Central 76 9,681 0.79 4,512 828,180 0.54 Eastern Canada 5 1,860 0.27 813 394,340 0.21 Northeast 124 18,188 0.68 12,958 1,916,792 Pacific 294 22,524 1.31 24,202 2,074,063 1.17 Southeast 131 14,785 0.89 8,544 1,582,557 Southwest 48 8,685 0.55 5,618 841,639 0.67 West Central 32 4,569 0.70 1,330 400,889 0.33 Western Canada 18 1,724 1.04 2,445 236,598 1.03 No Region Applicable 1 213 - 185 34,261 Total 729 82,229 60,607 8,309,319 0.73 Slide 16 – shows the results of the “$7.40 grass roots challenge” in The table shows both the number of $7.40 contributions or some multiple thereof and the total dollar amount received from each region. There were 729 contributions totaling $60,607, or 0.73%, of total contributions. For the $7.27 grass roots challenge in 2017, there were 1,727 contributions totaling $76,829. See Slide 16 – Support 1 for details. The $7.40 amounts are also compared to total contributions processed and the total dollars received to show the relative significance of this grass roots effort. While such grass roots campaigns are certainly encouraged and always welcomed, it should be noted that there are very large processing and people costs associated with the accumulation of this type of information since most of it must be handled manually. The cost benefit of the actual reporting of this information to this degree of specificity in this slide may not be worth the effort in future years, especially given our limited people resources.

$7.27 CHALLENGE CAMPAIGN – 2017 REGION NUMBER OF $7.27 CONTRIBUTIONS TOTAL NUMBER OF CONTRIBUTIONS PERCENTAGE OF TOTAL DOLLAR AMOUNT OF $7.27 CONTRIBUTIONS TOTAL $ AMOUNT CONTRIBUTIONS East Central 100 10,111 0.98 3,305 827,244 0.39 Eastern Canada 7 1,931 0.36 154 470,263 0.03 Northeast 377 18,863 2.00 21,235 1,969,931 1.08 Pacific 844 23,598 3.58 30,573 2,033,880 1.50 Southeast 249 14,999 1.66 9,603 1,509,192 0.64 Southwest 182 9,109 4,421 841,025 0.53 West Central 70 4,758 1.47 4,692 390,906 1.20 Western Canada 28 1,752 1.60 2,846 246,972 1.15 No Region Applicable - 195 49,984 Total 1,857 85,316 2.18 76,829 8,339,397 0.92 Slide 16 – Support 1 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. It shows the results of the “$7.27 grass roots challenge” in The table shows both the number of $7.27 contributions or some multiple thereof and the total dollar amount received from each region. There were 1,857 contributions totaling $76,829, or 0.92%, of total contributions of $8,339,397 in The $7.27 amounts are also compared to total contributions processed and the total dollars received to show the relative significance of this grass roots effort. While such grass roots campaigns are certainly encouraged and always welcomed, it should be noted that there are very large processing and people costs associated with the accumulation of this type of information since most of it must be handled manually. The cost benefit of the actual reporting of this information to this degree of specificity in this slide may not be worth the effort in future years, especially given our limited people resources.

7TH TRADITION SELF-SUPPORT – 2004 – 2018 69th General Service Conference Slide 17 – shows a 15 year history of generally increasing 7th Tradition of self-support contributions, with 2018 being $8,385,009, an increase of $3,190,694, or 61%, over the 15 years. See Slide 7 – Support 1 and Slide 7 – Support 2 for details of 2018.

PERCENTAGE OF GROUPS CONTRIBUTING – 2004 – 2018
69th General Service Conference Slide 18 – is a 15 year chart of the percentage of groups that have contributed from 2004 through It shows that 41.3% of the groups contributed in 2018, specifically 28,314 contributed groups out of 68,478 total groups per FNV. This compares to 43.7% of the groups that contributed in 2017, specifically 29,219 groups contributed out of 66,860 total groups. The decline in the percentage is due to 905 fewer groups that contributed in 2018, coupled with an increase of 1,618 new groups being listed in 2018.

7TH TRADITION SELF-SUPPORT – 2004 – 2018 Slide 19 – combines the prior two charts of the 15-year history of the 7th Tradition with the percentage of groups that contributed to G.S.O., being the red line running across the top of the slide with the percentages on the right side. For 2018, the total of 7th Tradition contributions was $8,385,009, with the percentage of groups contributing being 41.3%. For 2017, the total of 7th Tradition contributions was $8,409,452, with the percentage of groups contributing being 43.7%.

A DOLLAR IS NOT WHAT IT USED TO BE
69th General Service Conference A DOLLAR IS NOT WHAT IT USED TO BE Remember inflation when deciding upon your 7th Tradition Self-Support Contributions for: Group Meetings Online Recurring Contributions Birthday Gifts November Gratitude Month 1935: $1.00 2018: $18.55 Slide 20 – illustrates the pervasive and very negative effects of how inflation has diminished the value or purchasing power of one dollar since the very first days of A.A. through today. It shows that $1.00 in June 1935 is now equivalent to $18.55 in 2019, regardless of what that 1935 dollar was spent on, whether it went for alcohol, coffee or put into the 7th Tradition Self-Support basket. Source – 2019 inflation information is from U.S. Department of Labor, Bureau of Labor Statistics, CPI Inflation Calculator website.

INFLATION CALCULATOR COST OF A DRINK OVER TIME
69th General Service Conference INFLATION CALCULATOR COST OF A DRINK OVER TIME Bill W. & Dr. Bob Average Delegate’s Sobriety – 25 Years Slide 21 – is another slide that illustrates the pervasive and very negative effects of inflation. When Bill W. and Dr. Bob stopped drinking in 1935, the cost of a drink was 15 cents. Adjusted for inflation, 15 cents now equals $2.78 in When you, the delegates of the 69th General Service Conference on average stopped drinking in 1994, the cost of a drink was $ Adjusted for inflation, $2.00 now equals $3.45 in Maybe these two examples are another way to illustrate why today’s practice of putting a single $1 dollar bill into our 7th Tradition baskets is not the same as when that practice first started in a by-gone era. Today, much more is needed to be put into the basket for both the local groups’ needs, as well as GSO’s. Source – 2019 inflation Information is from the U.S. Department of Labor, Bureau of Labor Statistics, CPI Inflation Calculator website.

THROUGH OUR OWN SELF-SUPPORT
69th General Service Conference THROUGH OUR OWN SELF-SUPPORT Slide 21 – Support 1 – The A.A.W.S. Finance Subcommittee on Self-Support continues to work diligently to maintain the visibility of the various self-support initiatives. With the ever present possibility that print sales might decline in the future, it is vital that the Fellowship fully embrace the 7th Tradition. Delegates, other trusted servants and G.S.O. staff have offered many creative and practical ways to communicate the message of the need for self-support, and we are grateful for everyone’s participation. Such efforts have included the increased emphasize on the use of our online contribution system for Birthday Gifts and November Gratitude Month. See Slide 12 through Slide 15 for details about on-line contributions. See Slide 9b and Slide 11 for details on Birthday Gifts. The answer to self-support may very well be in sustained communication. We are grateful to all who contributes to their local group as a portion of those monies do work their way to G.S.O., helping ensure that G.S.O. has the necessary resources to continue providing the services that our members and groups are seeking. A special word of thanks goes out to all the delegates, D.C.M.s, and G.S.R.s, who have worked to help make this possible. And we hope information from this Conference will help assist in your communication about self-support and why a single dollar put into the basket today is no longer enough, as we saw in Slide 20 and Slide 21.

G.S.O.’s TWO BASIC FUNCTIONS
69th General Service Conference G.S.O.’s TWO BASIC FUNCTIONS Publishing Services on Behalf of the G.S.B. Slide 22 – transitions us to our service structure. Group Records

UNDERSTANDING 2018 TOTAL EXPENSES – $25.3 M 69th General Service Conference $ in Thousands 25,292 TOTAL COSTS & EXPENSES – SLIDE 4 LESS — COST OF LITERATURE RECURRING OPERATING EXPENSES – SLIDE 24 & SLIDE 60 LESS — OPERATING EXPENSES –GSO, GV & LV COST OF SERVICES PROVIDED TO FELLOWSHIP – SLIDE 30 5,556 19,736 Slide 23 – breaks down the 2018 total expenses of $25,292,628 (Slide 4) into two (2) key expense components: - recurring operating expenses of $19,736,206 (Slide 24). This expense is used in calculation of the Reserve Fund Ratio (Slide 60), - cost of services provided to the Fellowship of $11,426,835 (Slide 30). 2018 recurring operating expenses increased $1,677,165, or 9.3%, from See Slide 24 through Slide 28 for details cost of services provided to the Fellowship increased $1,204,185, or 11.8%, from See Slide 31 through Slide 33 for details. 8,309 11,427

SUMMARY OF ACTIVITY* – 2018 69th General Service Conference $ - in Thousands GSO Publishing Grapevine La Viña 2018 2017 REVENUE Net Sales 14,020 2,813 141 16,974 16,656 Contributions 8,385 8,409 Interest 31 20 TOTAL REVENUE 2,844 25,390 25,085 EXPENSES Cost of Goods Sold 4,567 929 60 5,556 5,267 Operating (Program & Supporting) Expenses 11,427 6,016 2,064 229 19,736 18,059 TOTAL EXPENSES 10,583 2,993 289 25,292 23,326 NET INCOME (LOSS) (3,042) 3,437 (149) (148) 98 1,759 RESERVE FUND at December 31 15,935 14,353 Operating Expenses Number of months coverage 9.7 9.5 * - Excludes Nonoperating Funds – Reserve, Capital Projects, Pension, Postretirement Medical Benefits Slide 23 – Support 1 is Slide 4 repeated for reference purposes. It is the income statement of each of the operating entities for Ten (10) key amounts are highlighted in yellow: Finance Light Finance Complete 7th Tradition Contributions – $8,385,009 Slide 7 Slide 7 – Support 1 Recurring Operating Expenses – $19,736,206 Slide 24 Slide 24 – Support 1 GSO Service Expenses – $11,426,835 Slide 30 Slide 30 – Support 1 GSO Shortfall – $3,041,826 Slide 35 Slide 36 – Support 1 AAWS Net Sales – $14,020,149 Slide 41 Slide 41 – Support 1 AAWS Net Income – $3,436,507 Slide 41 Slide 41 – Support 1 Grapevine Net Loss – $149,167 Slide 51 Slide 51 – Support 1 General Fund Support – La Viña – $148,467 Slide 54 Slide 54 Reserve Fund – $15,935,331 Slide 60 Slide 60 – Support 1 Coverage Ratio – 9.7 months Slide 60 Slide 60 – Support 1

UNDERSTANDING TOTAL EXPENSES – 3 YEAR HISTORY
69th General Service Conference UNDERSTANDING TOTAL EXPENSES – 3 YEAR HISTORY $ in Thousands 2018 2017 2016 Total Costs and Expenses – Slide 4 & Slide 23 25,292 23,326 22,645 Less – Cost of Literature Distributed – AAWS, GV & LV 5,556 5,267 5,235 Recurring Operating Expenses¹ - Slide 24 – S 1 19,736 18,059 17,410 Less – AAWS operating expenses 6,016 5,790 5,521 Less – GV & LV operating expenses 2,293 2,047 1,982 Total Operating Expenses 8,309 7,837 7,503 Cost of Services Provided – Slide 30 – S1 11,427 10,222 9,907 1- Amount of recurring operating expenses used in determining Reserve Fund Ratio. See Slide 60 – S 1. Slide 23 – Support 2 – breaks down the 2018 total expenses of $25,292,628 (Slide 4) into two (2) key expense components: - recurring operating expenses of $19,736,206 (Slide 24 – Support 1). This expense is used in calculation of the Reserve Fund Ratio (Slide 60 – Support 1). - cost of services provided to the Fellowship of $11,426,835 (Slide 30 – Support 1). 2018 recurring operating expenses increased $1,677,165, or 9.3%, from See Slide 24 through Slide 28 for details cost of services provided to the Fellowship increased $1,204,185, or 11.8%, from See Slide 31 through Slide 33 for details.

UNDERSTANDING 2017 TOTAL EXPENSES – $23.3 M 69th General Service Conference $ in Thousands 23,326 TOTAL COSTS & EXPENSES – SLIDE 4 LESS — COST OF LITERATURE RECURRING OPERATING EXPENSES – SLIDE 24 – S 1 - & SLIDE 60 LESS — OPERATING EXPENSES –GSO, GV & LV COST OF SERVICES PROVIDED TO FELLOWSHIP – SLIDE 30 5,267 18,059 Slide 23 – Support 3 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. It breaks down the 2017 total expenses of $23,326,010 (Slide 4) into two ( 2) key expense components: - recurring operating expenses of $18,059,041 (Slide 24 – Support 1). This expense is used in calculation of the Reserve Fund Ratio (Slide 60), - cost of services provided to the Fellowship of $10,222,650 (Slide 30). The 2017 amounts were consistent with 2016 amounts. See Slide 24 – Support 1 for details. 7,837 10,222

SUMMARY OF ACTIVITY* – 2017 69th General Service Conference $ - in Thousands GSO Publishing Grapevine La Viña 2017 2016 REVENUE Net Sales 13,694 2,811 151 16,656 16,160 Contributions 8,409 7,935 Interest .3 20 16 TOTAL REVENUE 2,831 25,085 24,111 EXPENSES Cost of Goods Sold 4,332 879 56 5,267 5,235 Operating (Program & Supporting) Expenses 10,222 5,790 1,826 221 18,059 17,410 TOTAL EXPENSES 10,122 2,705 277 23,326 22,645 NET INCOME (LOSS) (1,813) 3,572 126 (126) 1,759 1,466 RESERVE FUND at December 31 14,353 14,959 Operating Expenses Number of months coverage 9.5 10.3 * - Excludes Nonoperating Funds – Reserve, Capital Projects, Pension, Postretirement Medical Benefits Slide 23 – Support 4 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. It is the income statement of each of the operating entities for Finance Light Finance Complete 7th Tradition Contributions – $8,409,452 Slide 7 Slide 7 – Support 1 Recurring Operating Expenses – $18,059,041 Slide 24 Slide 24 – Support 1 GSO Service Expenses – $10,222,650 Slide 30 Slide 30 – Support 1 GSO Shortfall – $1,813,178 Slide 35 Slide 36 – Support 1 AAWS Net Sales – $13,693,372 Slide 41 Slide 41 – Support 1 AAWS Net Income – $3,572,017 Slide 41 Slide 41 – Support 1 Grapevine Net Income – $126,128 Slide 51 Slide 51 – Support 1 General Fund Support – La Viña – $126,440 Slide 54 Slide 54 Reserve Fund – $14,352,618 Slide 60 Slide 60 – Support 1 Coverage Ratio – 9.5 months Slide 60 Slide 60 – Support 1

RECURRING OPERATING EXPENSES – 2018 – $19.7 M FINANCIAL STATEMENT EXPENSE CATEGORIES PERCENTAGE BREAKDOWN Slide 24 – shows the percentage of each of the expense categories of 2018 total recurring operating expenses of $19,736,206. This expense is used in the Reserve Fund Ratio (Slide 60). Expenses related to people costs are 63.6% (2017 – 63.4%) and 5.0% for occupancy. We pay $23.23 per square foot for our 35,370 square feet of space and that includes janitorial services. Slide 57 – Support 12 contains a detailed breakdown of Retirement Expense (10.2%). Slide 26 contains a detailed breakdown of Travel, Meals and Accommodations (6.6%). Slide 27 contains a detailed breakdown of Contracted Services (8.5%). Slide 28 contains a detailed breakdown of Professional Fees (3.0%). Selling Expenses are primarily credit card processing (interchange) fees, along with the related credit card license and compliance testing arising from our sale of literature (2.2%). See Slide 24 – Support 1 for details.

RECURRING OPERATING EXPENSES FINANCIAL STATEMENT EXPENSE CATEGORIES 3 YEAR HISTORY $ in Thousands 2018 % of Total 2017 2016 Salaries 8,446 42.8 7,508 41.6 6,950 39.9 Taxes, Health & Group Insurance 2,090 10.6 1,946 10.8 1,853 Retirement – Slide 57 – S 12 2,024 10.2 1,984 11.0 1,971 11.3 Occupancy 994 5.0 897 863 Travel, Meals & Accommodations – Slide 26 1,297 6.6 930 5.2 1,291 7.4 Contracted Services – Slide 27 1,683 8.5 1,331 1,627 9.3 Professional Fees – Slide 28 597 3.0 660 3.7 263 1.5 Selling Expenses 426 2.2 703 3.9 570 3.3 Office Service & Expense 573 374 2.1 453 2.6 Postage & Express 340 1.7 430 2.4 342 2.0 All Other 1,266 6.4 1,296 6.9 1,227 7.1 Total – Slide 60 – S 1 19,736 100.0 18,059 17,410 $ and % increase over prior year 1,677 9.3% 649 3.7% 355 2.0% Slide 24 – Support 1 – breaks down $19,736,206 with the related percentages. This expense is used in the Reserve Fund Ratio (Slide 60 – Support 1) recurring operating expenses increased $1,677,165, or 9.3%, from Expenses related to people costs are 63.6% (2017 – 63.4%) and 5.0% for occupancy. We pay $23.23 per square foot for our 35,370 square feet of space and that includes janitorial services. Slide 57 – Support 12 contains a detailed breakdown of Retirement Expense (10.2%). Slide 26 contains a detailed breakdown of Travel, Meals and Accommodations (6.6%). Slide 27 contains a detailed breakdown of Contracted Services (8.5%). Slide 28 contains a detailed breakdown of Professional Fees (3.0%). Selling Expenses are primarily credit card processing (interchange) fees, along with the related credit card license and compliance testing arising from our sale of literature (2.2%). 24 – S 1

RECURRING OPERATING EXPENSES – 2018 – $19.7 M FINANCIAL STATEMENT EXPENSE CATEGORIES PERCENTAGE BREAKDOWN Slide 25 – shows the percentage of each of the expense categories of 2018 total recurring operating expenses of $19,736,206. This expense is used in the Reserve Fund Ratio (Slide 60). Expenses related to people costs are 63.6% (2017 – 63.4%) and 5.0% for occupancy. We pay $23.23 per square foot for our 35,370 square feet of space and that includes janitorial services. Slide 57 – Support 12 contains a detailed breakdown of Retirement Expense (10.2%). Slide 26 contains a detailed breakdown of Travel, Meals and Accommodations (6.6%). Slide 27 contains a detailed breakdown of Contracted Services (8.5%). Slide 28 contains a detailed breakdown of Professional Fees (3.0%). Selling Expenses are primarily credit card processing (interchange) fees, along with the related credit card license and compliance testing arising from our sale of literature (2.2%). See Slide 24 – Support 1 for details.

RECURRING OPERATING EXPENSES – 2017 – $18.1 M FINANCIAL STATEMENT EXPENSE CATEGORIES PERCENTAGE BREAKDOWN Slide 25 – Support 1 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. It shows the percentage of each of the major expense captions of 2017 total recurring operating expenses of $18,059,041. People costs represented 63.4% of total expenses. Occupancy cost in 2017 were $22.89 per square foot. It increases to $23.23 per square foot in Selling expenses include credit card processing fees.

TRAVEL, MEALS & ACCOMMODATIONS
69th General Service Conference TRAVEL, MEALS & ACCOMMODATIONS Slide 26 – breaks down total travel, meals and accommodations (T,M&A) of $1,296,808 in 2018, $930,089 in 2017 and $1,290,510 in 2016 into the major service activities. T,M&A for the General Service Conference (GSC) was $416,843 in 2018, compared to $221,072 in Regional Forums were $103,277 in 2018, compared to $81,904 in 2017; World Service Meeting (WSM) was $119,776 in 2018 compared to $115,782 in 2016; and Trustee Director activities were $534,048 in 2018, compared to $441,281 in T,M&A for both the GSC and the WSM are net of delegate fees and additional contributions received from Areas and countries attending these meetings. The net cost of rooms and meals of the 2018 GSC held in New York was $195,771 more than the 2017 GSC held in Rye (Slide 32 – Support 1). The “Other” category for 2016 includes the $106,336 penalty fee to cancel the 2018 General Service Conference originally scheduled for Rye. See Slide 26 – Support 1 for details.

TRAVEL, MEALS & ACCOMMODATIONS
69th General Service Conference TRAVEL, MEALS & ACCOMMODATIONS $ in Thousands 2018 % of Total 2017 2016 General Service Conference – Net* - Slide 32 – S 1 417 32.1 221 23.8 404 31.3 Regional Forums 103 7.9 82 8.8 100 7.7 World Service Meeting – Net* 120 9.3 (11) (1.1) 116 9.0 Trustee Director Activity** 534 41.2 441 47.4 436 33.8 Grapevine & La Vina 6 0.5 73 7.8 54 4.2 Other 117 124 13.3 181*** 14.0 Total – Slide 24 – S 1 1,297 100.0 930 1,291 Slide 26 – Support 1 – breaks down total travel, meals and accommodations (T,M&A) of $1,296,808 in 2018, compared to $930,089 in 2017 into the major service activities. T,M&A for the General Service Conference (GSC) was $416,843 in 2018, compared to $221,072 in Regional Forums were $103,277 in 2018, compared to $81,904 in 2017; World Service Meeting (WSM) was $119,776 in 2018 compared to $115,782 in 2016; and Trustee Director activities were $534,048 in 2018, compared to $441,281 in T,M&A for both the GSC and the WSM are net of delegate fees and additional contributions received from Areas and countries attending these meetings. The net cost of rooms and meals of the 2018 GSC held in New York was $195,771 more than the 2017 GSC held in Rye (Slide 32 – Support 1). The “Other” category for 2016 includes the $106,336 penalty fee to cancel the 2018 General Service Conference originally scheduled for Rye. * Net of delegate fees and additional contributions from Areas or countries ** T,M&A for trustees and directors activities *** 2016 amount includes penalty fee of $106,336 to cancel 2018 GSC originally scheduled for Rye

CONTRACTED SERVICES Slide 27 – lists the principle categories of contracted services for the last three years amounts are similar to prior years, except for Tech Support where the decline is due to replacing third-party vendors with recently hired employees who now perform these services in-house. The ERP system of $554,840 is for work to install the new Enterprise Reporting Package (ERP). The $117,000 decline in credit card processing costs is the result of our finance team working with the vendor and developing a more efficient and secure way to process our credit card transactions.

PROFESSIONAL FEES Slide 28 – lists the principle categories of professional fees for the last three years. The Manuscript litigation matter impacted both 2018 and 2017 results. During 2017, we incurred professional fees of $287,000 (legal and other). During 2018, we incurred another $29,802 in professional fees and paid $135,000 in the agreed upon settlement. During 2017, we incurred professional fees of $166,000 associated with legal reviews of our various business contracts that GSO enters into. As we have grown over the years, our business vendor relationships have become much more complex and it was felt that legal reviews of these relationships would be a prudent expenditure to ensure that our dealings were not exposing A.A. to risk. The “Other” category for 2018 does not include a $100,000 insurance recovery received in 2017 from the California litigation in 2015.

UNDERSTANDING 2018 TOTAL EXPENSES – $25.2 M 69th General Service Conference $ in Thousands 25,292 TOTAL COSTS & EXPENSES – SLIDE 4 LESS — COST OF LITERATURE RECURRING OPERATING EXPENSES – SLIDE 24 & SLIDE 60 LESS — OPERATING EXPENSES –GSO, GV & LV COST OF SERVICES PROVIDED TO FELLOWSHIP – SLIDE 30 5,556 19,736 Slide 29 – is Slide 23 repeated to now allow us to examine total expenses from the functional standpoint as opposed to a financial statement standpoint. It breaks down the 2018 total expenses of $25,292,628 (Slide 4) into two (2) key expense components: - recurring operating expenses of $19,736,206 (Slide 24). This expense is used in calculation of the Reserve Fund Ratio (Slide 60), - cost of services provided to the Fellowship of $11,426,835 (Slide 30). 2018 cost of services provided to the Fellowship increased $1,204,185, or 11.8% from See Slide 31 through Slide 33 for details. 8,309 11,427

Slide 30 – breaks down the total cost of services provided to the Fellowship of $11,426,835 into four buckets. The amounts shown above are the direct costs, principally people costs, of each of the major service activities performed by the GSO. Slide 31 – Outreach service activities, consisting of – Public Information; Cooperation with Professional Community; Treatment Facilities; Correctional Facilities; Overseas Services & Loners; Regional Forums; and Archives – $2,837,550. Slide 32 – Service Leadership, consisting of – General Service Conference; Trustee Director Activities; Nominating Activities; and Other (primarily the World Service Meeting) – $2,164,867. Slide 33 – Group Services – $2,235,265. Supporting Services – $4,189,153 includes the direct costs of administration, finance, human resources, information technology, and all other indirect overhead. It would not be possible for the service activities listed above to operate without these supporting services. 30

FELLOWSHIP SERVICES – DIRECT COSTS & PERCENTAGES
69th General Service Conference FELLOWSHIP SERVICES – DIRECT COSTS & PERCENTAGES $ in Thousands 2018 % of Total 2017 2016 Public Information 336 2.9 368 3.6 309 3.1 Cooperation with Professional Community 297 2.6 283 2.8 273 Treatment Facilities 131 1.1 141 1.4 170 1.7 Corrections 329 298 316 3.2 Overseas Services (Literature Assistance) & Loners 501 4.4 563 5.5 416 4.2 Regional Forums 453 4.0 465 4.5 490 4.9 Archives 791 6.9 780 7.6 722 7.3 Sub-Total – Outreach - Slide 31 – S 1 2,838 24.8 2,898 28.3 2,696 27.2 General Service Conference – Slide 32 – S 1 1,092 9.6 770 7.5 978 9.9 Trustees & Directors Activities 601 5.2 492 4.8 483 Nominating 269 2.3 293 International Convention - 3 World Service Meeting 203 1.8 (5) 195 2.0 Sub –Total – Service Leadership – Slide 32 2,165 18.9 1,526 14.9 1,952 19.7 Group Services – Slide 33 – S 1 2,235 19.6 2,275 22.3 2,264 22.9 Supporting Services (Technology, Finance, etc.) 4,189 36.7 3,523 34.5 2,995 30.2 Total Costs of Services Provided 11,427 100.0 10,222 9,907 $ increase over prior year – % increase over prior year 1,205 11.8% 315 3.2% 278 2.9% La Viña Service Activity - NOTE – GSB support for the La Viña service activity is NOT an actual operating expense of GSO, but is included here to show its relative significance of this service. 148 n/a 126 152 Slide 30 – Support 1 – breaks down 2018 total costs of services provided to the Fellowship of $11,426,835 into its functional service activities cost of services provided increased $1,204,185, or 11.8% from See Slide 31 through Slide 33 for details. This functional service breakdown is similar to the way the information has been presented in previous years and is a more understandable way of explaining what the costs of services provided to the Fellowship are. The amounts shown above are the direct costs, principally people costs, of each of the major service activities performed by GSO. This slide includes the General Service Board support for the La Viña service activity. The key is that the $148,467 is NOT an actual operating expense of GSO, but it is included to show its relative significance of this service activity compared to the others. This has been an expressed desire of many and the Second Subcommittee on Financial Reporting of La Viña concluded in 2018 that this approach is appropriate for our unaudited reporting. Slide 54 includes the Report of the Second Subcommittee on La Viña Reporting. 30 – S 1

Slide 30 – Support 2 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. The chart breaks down the total cost of services provided to the Fellowship of $10,222,650 into four buckets. The amounts shown above are the direct costs, principally people costs, of each of the major service activities performed by GSO. Slide 31 – Support 1 – Outreach service activities, consisting of – Public Information; Cooperation with Professional Community; Treatment Facilities; Correctional Facilities; Overseas Services & Loners; Regional Forums; and Archives – $2,897,401. Slide 32 – Governance, consisting of – General Service Conference; Trustee Director Activities; Nominating Activities; and Other (primarily the World Service Meeting) – $1,526,000. Slide 33 – Support 1 – Group Services – $2,274,676. Supporting Services – $3,523,000 includes the direct costs of administration, finance, human resources, information technology, and all other indirect overhead. It would not be possible for the service activities listed above to operate without these supporting services. 30 – S 2

OUTREACH SERVICES PROVIDED TO FELLOWSHIP 2018 – $2.8 M
69th General Service Conference OUTREACH SERVICES PROVIDED TO FELLOWSHIP 2018 – $2.8 M Slide 31 – breaks down 2018 total costs of outreach services of $2,837,550, consisting of Public Information; Cooperation with Professional Community; Treatment Facilities; Corrections; Overseas Services and Loners; Regional Forums; and Archives. This functional service breakdown is consistent with the way the information has been presented in prior years. The amounts shown above are the direct costs, principally people costs, of each of the major service activities performed by GSO. The 2018 costs are similar to those of prior years. See Slide 31 – Support 1 for comparisons with prior years. This slide includes the General Service Board support for the La Viña service activity. The key is that the $148,467 is NOT an actual operating expense of GSO, but it is included here to show its relative significance of this service activity compared to the others. This has been an expressed desire of many and the Second Subcommittee on Financial Reporting of La Viña concluded in 2018 that this approach is appropriate for our unaudited reporting. Slide 54 includes the Report of the Second Subcommittee on La Viña Reporting.

OUTREACH SERVICES PROVIDED TO FELLOWSHIP 3 YEAR HISTORY
69th General Service Conference OUTREACH SERVICES PROVIDED TO FELLOWSHIP 3 YEAR HISTORY Slide 31 – Support 1 – breaks down 2018 total costs of outreach services of $2,837,550, consisting of Public Information; Cooperation with Professional Community; Treatment Facilities; Corrections; Overseas Services and Loners; Regional Forums; and Archives. This functional service breakdown is consistent with the way the information has been presented in prior years. The amounts shown above are the direct costs, principally people costs, of each of the major service activities performed by GSO. The 2018 costs are similar to those of prior years. This slide includes the General Service Board support for the La Viña service activity. The key is that the $148,467 is NOT an actual operating expense of GSO, but it is included here to show its relative significance of this service activity compared to the others. This has been an expressed desire of many and the Second Subcommittee on Financial Reporting of La Viña concluded in 2018 that this approach is appropriate for our unaudited reporting. Slide 54 includes the Report of the Second Subcommittee on La Viña Reporting.

SERVICE LEADERSHIP ACTIVITIES 3 YEAR HISTORY
69th General Service Conference SERVICE LEADERSHIP ACTIVITIES 3 YEAR HISTORY Slide 32 – breaks down the 2018 costs of service leadership activities of $2,164,867 between the General Service Conference (GSC) – $1,092,163; Trustee Director Activities – $600,848; Nominating Activities – $269,144; and World Service Meeting – $202, Except for the GSC, 2018 costs were essentially even with prior years. The 2018 GSC held in NYC cost $321,705 more than 2017 GSC held in Rye due to higher cost of rooms, meals, audio visual equipment rentals and translations (Slide 32 – Support 1). In 2018, the World Service Meeting (WSM) was held in Durban, South Africa and the net cost, which falls to GSO, was $202,712 (primarily travel, meals and accommodations (T,M&A) of $119,776 – Slide 26 – Support 1) and translation services of $30,806. In 2016, the WSM was held in Rye, NY in 2016 and the net cost was $195,060 (primarily T,M&A of $115,782) and translation services of $45,413. There was no such meeting in 2017.

GENERAL SERVICE CONFERENCE – 5 YEAR HISTORY
69th General Service Conference GENERAL SERVICE CONFERENCE – 5 YEAR HISTORY $ in Thousands NYC RYE NYC NYC RYE Hotel Rooms 316 209 307 325 221 Meals 352 219 361 262 Sub–total 668 428 632 686 483 Less – Delegate Fee (93 in 2018) (167) (149) Less – Additional Area Contributions (176) (145) (164) (132) (99) Total Delegate Fees & Area Contributions (343) (294) (313) (281) (248) Difference between Hotel & Meals and Contributions 134 319 405 235 Travel 92 87 85 74 76 Total Travel, Meals & Accommodations – Slide 26 – S 1 417 404 479 311 Other Direct Costs – Materials, translation, etc. 350 195 240 275 185 Total Direct Costs 767 416 644 754 496 Operating Expenses - Salaries, Etc. 354 334 322 301 Total – Slides 30 – S1 1,092 770 978 1,076 797 Slide 32 – Support 1 – details the costs of the General Service Conference during the past five years. The direct costs of hotel rooms and meals are listed first and from that total is deducted the delegate contributions of $1,800 per delegate in 2018 ($1,600 for other years), and the receipt of any additional area contributions. Next is added the other direct costs of travel, and then materials and translations. The total direct costs of $1,092,163 for 2018 is the amount on Slide 30 – Support 1. The 2018 GSC held in NYC cost $321,705 more than 2017 GSC held in Rye due to higher costs of rooms, meals, audio visual equipment rentals and translations. Total travel, meals, and accommodations of $416,843 is the amount on Slide 26 – Support 1. There are 93 delegates; 26 trustees and corporate directors; and 17 GSO, GV & LV staff members.

GROUP SERVICES – 2018 – $2.2 M Slide 33 – shows the eight services that make up Group Services. For 2018, the total cost of Group Services was $2,235,265. The percentages were derived from the detailed expense amounts shown in Slide 33 – Support 1. The 2018 amounts were essentially even with those of prior years.

GROUP SERVICES – 3 YEAR HISTORY
69th General Service Conference GROUP SERVICES – 3 YEAR HISTORY $ in Thousands 2018 % of Total 2017 2016 Group Services Staff Assignment Activities 625 28.0 659 29.0 717 31.7 Box 459 219 9.8 209 9.2 222 French Services 23 1.0 22 24 1.1 Spanish Services 28 1.2 25 Special Needs 98 4.4 74 3.3 73 3.2 A.A. Directories 7 0.3 .3 11 .5 Records & Files Department 556 24.9 591 26.0 573 25.3 Contributions, Processing, Verification & Documentation 679 30.4 688 30.2 619 27.3 Total 2,235 100.0 2,275 2,264 Slide 33 – Support 1 – details the 2018 direct costs of each of the eight categories included in major functional service activity entitled “Group Services” of $2,235,265, shown on Slide The 2018 amounts were essentially even with those of prior years. Each year, we receive a large number of questions about the cost of processing our Seventh Tradition contributions. The direct costs is $679,383, which includes the people, who receive the contributions in the mail, process, and then send out thank you replies for the 82,229 individual contributions received, nearly 320 per day, with 89.4% being received in the mail. Slide 12 through Slide 15 show the number of Group and Individual contributions received in the mail. 33 – S 1

GROUP SERVICES – 2017 – $2.3 M Slide 33 – Support 2 – is the slide from the 68th GSC Finance Presentation repeating the 2017 information for reference purposes. It shows the eight services that make up Group Services. For 2017, the total cost of Group Service costs was $2,274,676. The percentages are derived from the detailed expense amounts shown in Slide 33 – Support 1. The 2017 amounts were essentially even with those of prior years.

GENERAL SERVICE OFFICE – NUMBER OF EMPLOYEES 2018 2017 Group Services – Staff Assignment Activities 11 13 Archives 5 Publishing 12 10 Inventory Control 3 2 Order Entry Mail & Shipping 4 Contributions 6 Records/Files Human Resources Finance 8 7 Information Services Meetings, Events & Travel Staff & Administration 17 14 Office Services Total 84 83 Slide 33 – Support 3 – provides a breakdown of the 84 General Service Office employees as of December 31, 2018, compared to 83 at December 31, 2017. 33 – S 3

SERVICES SUPPORTED BY 7TH TRADITION DOLLARS AND PERCENTAGE
69th General Service Conference Slide 35 – shows the 2018 shortfall of $3,041,826 between 7th Tradition of self-support received of $8,385,009 (Slide 7) and the cost of services provided to the Fellowship of $11,426,835 (Slide 30). Approximately 73.4% of the cost of services provided to the Fellowship was covered in 2018, compared to 82.3% in 2017 and 80.1% in 2016 (Slide 36 and Slide 36 – Support 1). The decline in the 2018 percentage is the driven by the previously discussed $1,204,185 increase in the cost of services provided during 2018.

SERVICES SUPPORTED BY 7th TRADITION PERCENTAGE – 2004 – 2018 Slide 36 – shows the percentage of the cost of services provided to the Fellowship that were covered through the 7th Tradition for the last fifteen years. For 2018, the percentage was 73.4%. See Slide 36 – Support 1 for details. 36

SERVICES SUPPORTED BY 7th TRADITION DOLLARS AND PERCENTAGE – 2004 – 2018 Slide 36 – Support 1 – shows the dollars and the percentage of the cost of services provided to the Fellowship that were covered through the 7th Tradition for the last fifteen years. For 2018, the percentage was 73.4%.

MEMBER SERVICES & STATISTICS – 3 YEAR HISTORY
69th General Service Conference MEMBER SERVICES & STATISTICS – 3 YEAR HISTORY 2018 2017 2016 Number of Members 1,418,177 1,381,954 1,362,402 Cost of Services per Member $8.06 $7.40 $7.27 7th Tradition Self-Support Contributions per Member 5.91 6.09 5.82 Cost of Services NOT covered by Self-Support 2.15 1.31 1.45 Number of Groups 68,478 66,860 66,336 Cost of Services per Group $166.87 $152.90 $149.34 7th Tradition Self-Support Contributions per Group 122.45 125.78 119.62 44.42 27.12 29.72 Percentage of Groups Contributing 41.3% 43.7% 41.5% Number of Groups that Contributed 28,314 29,219 27,542 7th Tradition Self-Support of Groups that contributed – Slide 8 $237.35 $231.34 $234.41 Slide 37 – displays key member statistics for 2018 and the prior two years. These member statistics are simple calculations using the 7th Tradition contributions and the cost of services provided to the Fellowship divided by the number of members and groups shown on the Contribution Statistical Report. Remember that those membership numbers are only as good as the data we capture in an anonymous fellowship system. The 2018 cost of services provided of $11,426,835 equates to $8.06 per member and $ per group. The 2018 contributions of $8,385,009 equates to $5.91 per member and $ per group. The cost of services provided are NOT covered through 7th Tradition is $2.15 per member and $44.42 per group. Only 28,353 groups, or 41.3%, actually contributed towards the 7th Tradition. This equates to an average amount of $ per group. 37

MEMBER SERVICES & STATISTICS – 2018
69th General Service Conference MEMBER SERVICES & STATISTICS – 2018 FINANCIAL STATEMENT PER GROUP OR MEMBER AMOUNT Number of Members 1,418,177 Cost of Services $11,426,835 $8.06 7th Tradition Self-Support Contributions 8,385,009 5.91 Cost of Services NOT covered by Self-Support 3,041,826 2.15 Number of Groups 68,478 11,426,835 $166.87 122.45 44.42 Slide 37 – Support 1 – displays key member statistics for These member statistics are simple calculations using our 7th Tradition contributions on Slide 7 – Support 1 and the cost of services provided to the Fellowship on Slide 30 – Support 1 divided by the number of members and groups shown on the Contribution Statistical Report. Remember that those membership numbers are only as good as the data we capture in an anonymous fellowship system. Using the 2018 cost of services provided of $11,426,835 from Slide 30 – Support 1, the cost of services is $8.06 per member or $ per group. Using the 2018 contributions of $8,385,009 from Slide 7 – Support 1, self-support per member of $5.91 or per group of $ The cost of services provided NOT covered through self-support is $2.15 per member and $44.42 per group. 37 – S 1

SERVICES SUPPORTED BY 7TH TRADITION - PER GROUP -
69th General Service Conference Slide 38 – shows the same information as the Slide 35, but from the perspective of an individual group. For 2018, the shortfall of $44.42 per group between 7th Tradition received of $8,385,009 (Slide 7), or $ per group, and the cost of the services provided to the Fellowship of $11,426,835 (Slide 30), or $ per group. The group amounts are based on 68,478 groups. Approximately 73.4% of the cost of services provided to the Fellowship were covered in 2018, compared to 82.3% in 2017 and 80.1% in The decline in the 2018 percentage is the driven by the previously discussed $1,204,185 increase in cost of services during 2018.

SERVICES SUPPORTED BY 7TH TRADITION - PER MEMBER -
69th General Service Conference Slide 39 – shows the same information as the Slide 35, but from the perspective of an individual member. For 2018, the shortfall of $2.05 per individual member between 7th Tradition received of $8,385,009 (Slide 7), or $5.91 per member, and the cost of services provided to the Fellowship of $11,426,835 (Slide 30), or $8.06 per member. The member amount is based on 1,418,177 members. Approximately 73.4% of the cost of services was covered in 2018, compared to 82.3% in 2017 and 80.1% in The decline in the 2018 percentage is the driven by the previously discussed $1,204,185 increase in cost of services during 2018.

G.S.O.’s TWO BASIC FUNCTIONS
69th General Service Conference G.S.O.’s TWO BASIC FUNCTIONS Publishing Services on Behalf of the G.S.B. Slide 40 – transitions us to our publishing activities. Group Records

AAWS – PUBLISHING ACTIVITY – 5 YEAR HISTORY
69th General Service Conference $ in Thousands Slide 41 – shows A.A.W.S. gross revenues from all literature sold and the net publishing profits earned for each of the last five years. In 2018, gross sales were 1,674,703 units totaling $14,235,594, up 29,798 units, or 1.8%, and up $337,044, or 2.4%, from 2017 gross sales of 1,644,905 units totaling $13,898,550. Although gross publishing revenue increased, 2018 net profit decreased to $3,436,507, down $135,510, or 3.8%, from $3,572,017 in 2017 due to higher publishing related expenses. The number of orders processed were 26,789 in 2018, up from 25,422 in 2017, an increase of 1,367, or 5.4%. Approximately 82.7% of all 2018 sales were to intergroups, central offices, groups and individuals, compared to 77.4% in See Slide 41 – Support 1 for the income statement.

AAWS – PUBLISHING – STATEMENT OF ACTIVITY $ in Thousands 2018 2017 INCREASE (DECREASE) Gross Sales 14,235 13,899 336 Less – Discounts allowed 215 205 10 Interest earned - .3 (.3) Net Sales – Literature 14,020 13,694 326 Cost of Literature sold 2,799 2,628 171 Direct Shipping and Warehousing 1,768 1,704 64 Gross Profit 9,453 9,362 91 Gross Profit Percentage 67.4% 68.4% (1.0%) Program Expenses 3,002 3,137 (135) Supporting Expenses 3,014 2,653 361 Total Expenses 6,016 5,790 226 Net Operating Income 3,437 3,572 Slide 41 – Support 1 – is the income statement with 2018 gross sales of 1,674,703 units totaling $14,235,594, up 29,798 units, or 1.8%, and up $337,044, or 2.4%, from 2017 gross sales of 1,644,905 units totaling $13,898,550. Although gross revenue increased, 2018 net profit decreased to $3,436,507, down $135,510, or 3.8%, from $3,572,017 in 2017 due to higher publishing related expenses. The number of orders processed were 26,789 in 2018, up from 25,422 in 2017, an increase of 1,367, or 5.4%. Approximately 82.7% of all 2018 sales were to intergroups, central offices, groups and individuals, compared to 77.4% in A frequent question is how much in royalties have been paid since the beginning of A. A. The total royalties paid were approximately $10.5 million. Royalty payments ended in 2015 with the death of the last eligible person. Literature distributed without charge is not accounted separately, but is included in the cost of printing as a reduction of inventory and reflected in cost of literature sold. Shipping and handling charges billed to customers are included in revenues. Direct shipping and warehousing costs were $1,768,063 in 2018, with shipping being approximately 75% of the total. 41 – S 1

RECONCILIATION OF UNITS SOLD & REVENUES Units & $ in Thousands 2018 2017 2016 2015 2014 2013 Units Sold 1,675 1,645 1,574 1,485 2,282 1,794 Less – 75th Anniversary Big Book (4) (7) (13) (178) Less – 3Q 2014 Bulk Purchases* (307) Normalized Units Sold 1,671 1,641 1,567 1,472 1,797 Variance to 2014 Normalized (126) or (7.0%) (325) or (18%) Actual Revenues – Slide 41 – S 1 $14,235 $13,899 $13,414 $12,720 $17,128 $12,842 Less – 75th Anniversary (47) (50) (69) (130) (1,889) Less – 3Q 2014 Bulk Sales* (2,000) Normalized Revenues 14,188 13,849 13,345 12,590 13,239 12,842 949 or 7.2% (649) or (5%) * - Third quarter bulk purchases made prior to 10/1/14 literature price increase Slide 41 – Support 2 – reconciles or normalizes the total units sold and dollars realized for the 75th Anniversary Big Book and the bulk purchases that occurred in the third quarter of 2014 prior to the literature sales price increase on October 1, 2014 for purposes of showing the normalized literature sales trend over the last six years. The purpose of the slide is to show the trend line of units sold and revenues earned. Although the units sold in 2018 increased to 29,798, or 1.8%, compared to 2017, the slide shows that 2018 normalized unit sales have declined by 7.0% from the normalized two-year period of 2013 and 2014, prior to the last price increase. During 2016, the remaining 5,000 units of the 75th Anniversary Big Book held in inventory with an accounting value were sold. During 2017 and 2018, 3,808 units equaling $50,395 and 4,068 units equaling $46,500, respectively, of the 75th Anniversary Big Books were sold. Since in prior years, the inventory accounting value had been written off to zero, these sales were 100% profit. Normalization means removing noncomparable items in each year and then comparing the remaining balance so as to observe a “normal” or “like items” trend. Normalization means removing noncomparable items in each year and then comparing the remaining balances so as to observe a “normal” or “like items” trend. 41 – S 2

AAWS – PUBLISHING – 2018 ACTUAL VS 2018 BUDGET $ in Thousands 2018 ACTUAL BUDGET INCREASE (DECREASE) Gross Sales – Slide 41 – S 1 14,235 14,000 235 Less – Discounts allowed 215 220 5 Interest earned - Net Sales – Literature 14,020 13,780 240 Cost of Literature Sold 2,799 2,725 74 Direct Shipping and Warehousing 1,768 1,795 (27) Gross Profit 9,453 9,260 193 Gross Profit Percentage 67.4% 67.2% .2% Operating (Program & Supporting) Expenses 6,016 6,011 Net Operating Income 3,437 3,249 188 Slide 41 – Support 3 – compares 2018 actual results to the 2018 budget. Gross sales of $14,235,594 were $235,594, or 1.7%, more than the budget of $14,000,000. This increase in sales along with a decrease of $27,000 in the cost of shipping and warehousing is offset by an increase of $74,000 in the cost of literature sold. The net of all these items resulted in an increase of $187,507, or 5.8%, in actual 2018 net profit to $3,436,507, greater than the budget of $3,249,000. 41 – S 3

2018 LITERATURE SALES – PERCENTAGE OF $14.2 MILLION Slide 42 – breaks down the 2018 total gross publishing revenue of $14,235,594 showing the significance of the Big Book sales. See Slide 43 for history of Big Book sales. Sales revenue earned on Big Book was $6,882,400, or 48.4% of 2018 sales revenue; Twelve & Twelve was $2,481,300, or 17.4%; Daily Reflections was $1,276,000, or 9.0%; and Living Sober was $519,300, or 3.6%. See Slide 42 – Support 1 for details. Revenue from E-Books was $215,700, or 1.5% of total revenue. See Slide 45 for details. 42

LITERATURE TITLES Units and $ in Thousands 2018 Units Sold Units Sold as % of Total Revenue Revenue as % of Total 2017 Big Book – Slides 43 & 44 902 53.9 $6,882 48.4 905 55.0 $6,900 49.6 12 Steps & 12 Traditions 337 20.1 2,481 17.4 331 2,427 17.5 Daily Reflections 139 8.3 1,276 9.0 128 7.8 1,174 8.4 Living Sober 117 7.0 519 3.6 112 6.8 492 3.5 All Other1 125 7.4 2,861 114 2,697 19.5 Total Physical Books 1,620 96.7 14,019 98.5 1,590 13,690 E-Books – Slide 45 55 3.3 216 1.5 209 Total 1,675 100.0 14,235 1,645 13,899 1 Includes pamphlets ( $480; $459) and foreign literature ( $902; $875) Slide 42 – Support 1 – lists the principle literature titles showing both the number of units sold and the dollar revenue earned, along with the percentage to the total units and total revenue for 2018 and (2018 – 1,674,703 units equal $14,235,594; 2017 – 1,644,905 units equal $13,898,550). The Big Book represented 53.9% of all units sold (902,004 out of 1,674,703) in 2018 and 48.4% of the 2018 revenue ($6,882,000 out of $14,235,594). Also, 55,330 E-books were sold in 2018, representing 3.3% of the total units sold and 1.5% of total revenues. 98% of the E-books sold were in English. See Slide 45 for details of E-books sales. 42 – S 1

BIG BOOK – UNITS SOLD – 1999 – 2018 * * Slide 43 – shows the number of Big Books sold in English during the last two decades, with 902,004 being sold in See Slide 44 for distribution of sales between A.A. related buyers and others. *Excludes 75th Anniversary Edition

BIG BOOK –– BREAKDOWN OF SALES ALL ENGLISH VERSIONS
69th General Service Conference Slide 44 – breaks down the Big Books sold in English between A.A. related entities versus third parties during the last 15 years. During 2018, there were 902,004 Big Books sold (Slide 43), with 478,433 books, or 53.0%, (51.5% ) sold to Central Offices and Intergroups (blue line); 267,831 books, or 29.7%, (25.9% ) sold to by A.A. Groups and individuals (green line); and 155,740 books, or 17.3%, (22.6% ) sold to third parties, such as treatment centers and hospitals (red line).

Big Book Pricing Year Published Original Price 2019 Inflation Adjusted Price First 1939 $3.50 $64.47 Second 1955 $4.50 $42.84 Third 1976 $5.65 $25.29 Fourth 2001 $6.00 $8.57 Slide 44 – Support 1 – was created to put into perspective the October 1, 2014 price increase of the Big Book from $8.00 to $ This decision was fully vetted at both the A.A.W.S. and G.S.B. board meetings. It was agreed that for the long-term viability of A.A. additional revenue was needed to maintain the level of services that the Fellowship has come to expect. This slide also puts into perspective that even at $9.50 the Big Book today is still a bargain compared to what it has sold for during the past 80 years. Source – 2019 inflation information based on the U.S. Department of Labor, Bureau of Labor Statistics, CPI Inflation Calculator.

History of LITERATURE pricing Actions
69th General Service Conference Restored the price of the Big Book in July 2004 by raising the price by $1. Announced increases in certain book prices and handling charges effective July 1, 2005. Price increases July 2009 and October 2014 for long-term fiscal health. Decision made that there will be no general literature price increase in Slide 44 – Support 2 – provides history of our recent literature price increases. It should be noted that the A.A.W.S. Board decided that there would be no general literature price increase in 2019.

E-BOOK UNIT SALES – 2018 69th General Service Conference Slide 45 – breaks down the total E-book units sold of 55,330 in 2018, an increase of 540, or 1.0%, compared to 54,790 in 2017. Big Book – 2018 – 15,655 (28.3%); – 16,094 (29.4%) and Twelve & Twelve – 2018 – 15,928 (28.8%); – 15,211 (27.8%). The distribution of all E-book units sold is: Kindle – 66.7% (2017 – 66.0%) iTunes – 30.7% ( 2017 – 30.9%) Nook – 2.6% (2017 – 3.1%).

GSO & AAWS – OPERATING RESULTS – 2018
69th General Service Conference 7th Tradition Self-Support 8,385,009 Slide 7 Cost of Service Activities 11,426,835 Slide 30 Shortfall (3,041,826) Publishing Profits 3,436,507 Slide 41 Net Profit 394,681 Slide 46 – is a visualization of how the 2018 shortfall of $3,041,826 (Slide 35) between the 7th Tradition of $8,385,009 (Slide 7) and the cost of services provided to the Fellowship of $11,426,835 (Slide 30) are covered by literature profits of $3,436,507 (Slide 41), resulting in a net profit of $394,681.

GSO & AAWS – OPERATING RESULTS – 2018 & 2017
69th General Service Conference GSO & AAWS – OPERATING RESULTS – 2018 & 2017 $ in Thousands 2018 GSO Slide 7 – S 1 & Slide 30 – S 1 PUBLISHING Slide 41 – 1 2017 Slide 7 – S 2 & Slide 30 – S 1 REVENUE Net Sales 14,020 13,694 Contributions 8,385 8,409 TOTAL REVENUE EXPENSES Cost of Goods Sold 4,567 4,332 Operating (Program & Supporting) Expenses 11,427 6,016 10,222 5,790 TOTAL EXPENSES 10,583 10,122 NET INCOME (LOSS) OPERATIONS (3,042) 3,437 (1,813) 3,572 Slide 46 – Support 1 – is the income statement. For 2018, the shortfall between 7th Tradition of self-support of $8,385,009 on Slide 7 – Support 1 and the cost of services provided to the Fellowship of $11,426,835 on Slide 30 – Support 1 are covered by literature profits of $3,436,507 on Slide 41 – Support 1, resulting in a net profit of $394,681. For 2017, the shortfall between the 7th Tradition of $8,409,452 on Slide 7 – Support 2 and the cost of services of $10,222,650 on Slide 30 – Support 1 are covered by literature profits of $3,572,017 on Slide 41 – Support 1, resulting in a net profit of $1,758,839. $395 $1,759

SELF-SUPPORT OF THE WORLD SERVICES OF ALCOHOLICS ANONYMOUS
69th General Service Conference SELF-SUPPORT OF THE WORLD SERVICES OF ALCOHOLICS ANONYMOUS The A.A. spiritual principle of self-support enables us to pursue our primary purpose of carrying the message to the still-suffering alcoholic with a shared sense of responsibility for our lifesaving work and without interference or financial dependence on outsiders. From our Fellowship's earliest days, the expenses of the General Service Office, and the world services provided by it, have exceeded the amount derived from contributions of A.A. groups and members. As a result, providing these needed services has necessarily been supported in part by income from the sale of A.A. literature. It is the policy of the General Service Board that income from literature sales should only be in amounts required to allow continued provision of vitally needed services and maintenance of a Reserve Fund. We hope that the day will come when A.A. groups and members, through their contributions, will be able to fund fully the services provided by the General Service Office. If that is achieved, revenues from literature sales will only be needed in amounts necessary to cover the actual costs associated with literature production and to maintain a Reserve Fund. Approved by the General Service Board February 3, 2014 Slide 46 – Support 2 – is the slide from the 64th GSC Finance Presentation repeating the 2013 information for reference purposes. It is the self-support and literature policy formally adopted by the General Service Board at its February 3, 2014 meeting. 46 – S 2

GSO & AAWS – OPERATING RESULTS – 2004 – 2018
69th General Service Conference Slide 47 – shows the net operating results since 2004, including the $394,681 profit earned in As explained in the footnote, since the Reserve Fund Ratio was nearing its suggested 12 month upper limit in the early part of the last decade, A.A.W.S., consistent with established policy, lowered literature prices to incur an operating loss as the way of reducing the Reserve Fund Ratio. Since the Reserve Fund Ratio was nearing its suggested 12 month upper limit in the early part of the decade, A.A.W.S., consistent with established policy, lowered literature prices to incur an operating loss as the way of reducing the Reserve Fund.

GSO & AAWS – 2019 BUDGET $ in Thousands 2019 GSO BUDGET PUBLISHING BUDGET 2018 Slide 7 – S 1 & Slide 30 – S 1 PUBLISHING Slide 41 – 1 REVENUE Net Sales $14,775 $14,020 Contributions $8,385 TOTAL REVENUE 8,385 14,775 14,020 EXPENSES Cost of Goods Sold 5,000 4,567 Operating (Program & Supporting) Expenses 11,431 6,228 11,427 6,016 TOTAL EXPENSES 11,228 10,583 NET INCOME (LOSS) OPERATIONS (3,046) 3,547 (3,042) 3,437 Slide 48 – shows a budgeted net income of $501,000 in 2019 compared to an actual net income of $394,681 in Budgeted publishing revenues and the related costs of goods sold and shipping are $800,000 higher than 2018 actual due to the publication of the new book, “Our Great Responsibility 1951 – 1970.” The budget includes 100,000 units and $800,000 of gross revenue for this new book. When the 2019 publishing profit of $3,547,000 is combined with the 7th Tradition of $8,385,000, along with the cost of services of $11,431,000, a budgeted net profit of $501,000 results. Further, assuming that there are no changes in the way business is conducted or 7th Tradition of self-support does not increase, then this 2019 budgeted net profit is projected to become a smaller budgeted net profit of $449,000 in 2020 and declining to a budgeted net profit of $54,000 in 2021. $501 $395 GSO/AAWS combined projected net profit in 2020 – $449 & net profit in 2021 – $54.

AAWS – PUBLISHING – 2019 BUDGET $ in Thousands 2019 BUDGET 2018 ACTUAL INCREASE (DECREASE) Gross Sales 15,000 14,235 765 Less – Discounts allowed 225 215 (10) Net Sales – Literature 14,775 14,020 755 Cost of Literature Sold 3,100 2,799 301 Direct Shipping and Warehousing 1,900 1,768 132 Gross Profit 9,775 9,453 322 Gross Profit Percentage 66.2% 67.4% (1.2%) Operating (Program & Supporting) Expenses 6,228 6,016 212 Net Operating Income 3,547 3,437 110 Slide 48 – Support 1 – compares 2018 actual results with the 2019 budget for A.A.W.S. Budgeted publishing revenues and the related costs of goods sold and shipping are larger than 2018 actual due to the publication of the new book, “Our Great Responsibility 1951 – 1970.” The budget includes 100,000 units and $800,000 of gross revenue for this new book. GSO/AAWS combined projected net profit in $501; net profit in $449 & net profit in 2021 – $54. 48 – S 1

GRAPEVINE & LA VIÑA FACTS
69th General Service Conference GRAPEVINE & LA VIÑA FACTS ALSO PUBLISHES 28 BOOKS & 26 E-BOOKS 7 ESPANOL BOOKS & 4 ESPAÑOL E-BOOKS 6 FRANCAIS BOOKS & FRANCAIS E-BOOKS 22 CDS (11 ENGLISH, 11 ESPAÑOL) 24 OTHER CONTENT ITEMS GV AUDIO MAGAZINE (GV ONLINE SUBSCRIPTION) SUBSCRIPTIONS PRINT – U.S $28.97/yr. CAN. $35.00/yr INT. $42.00/yr. GV ONLINE – $34.97/yr. GV COMPLETE – $49.97/yr. GV APP – $23.88/yr. La Viña – U.S $11.97/yr. CAN/INT. $14.00 CONNECTING WITH THE FELLOWSHIP Each month 150 – 200 stories are submitted to GV and 150 stories are submitted to LV bimonthly for possible publication 45,900 members receive the GV DAILY QUOTE every day 63,700 receive monthly enewsletters from GV and LV 1,400 Spanish speaking members receive the La Viña Weekly Quote and 1,700 receive the La Viña text message. Slide 49 – transitions to our next topic of Grapevine and La Viña with some facts that many in the Fellowship may not be completely aware of. Hopefully, information such as this will assist in increasing awareness and ultimately sales. Most noteworthy is that GV does NOT receive any of the group contributions sent to the General Service Office. Also, GV is legally NOT allowed to raise funds through contributions. Its only source of revenue is through the sale of magazines and other content produced materials. Further, since it can not advertise or promote its products, the natural attrition or decline in annually sold print materials makes it difficult to maintain a constant level of subscription business, without the full and complete support of the Fellowship. That is why it so necessary to undertake initiatives, such as the automatic check the box for the purchase of a subscription to the Grapevine included in the participate registration form to the 80th International Convention, “2018 Subscription Challenge,” “Carry the Message with the Subscription Gift Certificates,” and “Grow Your Grapevine.” Magazines function on the ongoing need of renewal by existing subscribers and acquisition of new subscribers to succeed. Involvement of the entire Fellowship is necessary for success.

GRAPEVINE – AVERAGE CIRCULATION – 5 YEAR HISTORY
69th General Service Conference Slide 50 – shows Grapevine’s magazine print, online and mobile app subscriptions for the last five years. The total of all types of subscriptions was 72,300 in 2018, down 3,029, or 4.0%, from 75,329 in Print subscriptions were down 2,392, or 3.5%, to 66,857 in 2018 from 69,249 in On-line and APP subscriptions were down 637, 10.5%, to 5,443 in 2018 from 6,080 in These results reflect the necessary initiatives undertaken by Grapevine during the past several years, such as the automatic check the box for the purchase of a subscription to the Grapevine included in the participate registration form to the 80th International Convention, “2018 Subscription Challenge,” “Carry the Message with the Subscription Gift Certificates,” and “Grow Your Grapevine.” Magazines function on the ongoing need of renewal by existing subscribers and new subscribers in order to succeed.

GRAPEVINE – KEY AMOUNTS – 5 YEAR HISTORY
69th General Service Conference Slide 51 – shows the gross profit earned on both magazines and other content publishing activities, along with the resulting net results in each of the last five years, with 2018 being $1,321,696, $562,438 and a loss of $149,167, respectively. It should be noted that GV would have essentially broken even for 2018, if had not been for severance payments of $126,303 and related legal expenses. See Slide 51 – Support 1 for the traditional income statement. See Slide 51 – Slide 2 for the break down of Other Content Publishing Revenue. See Slide 51 – Support 3 for Gross Profit Analysis. See Slide 51a for GV operating results 2004 – 2018.

GRAPEVINE – STATEMENT OF ACTIVITY
69th General Service Conference AVERAGE CIRCULATION – PRINT 66,857 69,249 (2,392) ONLINE & APP 5,443 6,080 (637) 2018 ACTUAL 2017 INCREASE (DECREASE) Magazine Revenue 1,978 2,045 (67) Magazine Direct Costs (656) (651) 5 Gross Profit on Magazine 1,322 1,394 (72) Other Publishing Revenue – Slide 51 – S 2 835 767 68 Cost of Goods Sold (273) (229) 44 Gross Profit on Other Publishing Items 562 538 24 Total Gross Profit 1,884 1,932 (48) Costs and Expenses Editorial Costs 658 701 (43) Circulation and Business 1,026 936 90 General and Administrative 380 189 191 Total Costs and Expenses 2,064 1,826 238 Interest Income 31 20 11 Net Income (149) 126 (275) Slide 51 – Support 1 – is the traditional income statement for 2018 actual results compared to the prior year. Net loss in 2018 was $149,167, a decline of $275,295, from net income of $126,128 in The decline of $275,295 in net income resulted primarily from an increase in expenses of $238,492, or 13.1%, combined with a decrease in total gross profit from publishing activities of $47,563. The 2018 expenses also included severance payments of $126,303 and related legal expenses. If you add magazine income of $1,977,834 and the other publishing revenue of $835,099, these two numbers equal $2,812,933 on Slide 3. The other Grapevine number on this slide and Slide 3 is net loss of $149,167.

GV OTHER PUBLISHING REVENUE – 5 YEAR HISTORY
69th General Service Conference GV OTHER PUBLISHING REVENUE – 5 YEAR HISTORY Titles 2018 2017 2016 2015 2014 Language of The Heart – all languages & formats 108,927 99,876 101,674 106,213 109,678 Emotional Sobriety - Vol. I & II 83,341 70,235 72,626 82,936 84,010 One on One 13,715 17,576 19,966 22,072 35,884 No Matter What 15,663 15,503 20,795 26,198 29,152 Grapevine Daily Quote 21,555 24,290 30,904 44,924 81,978 Happy, Joyous & Free – all languages 29,323 37,888 49,295 143,302 18,960 Forming True Partnerships 14,359 16,721 37,357 47,549 - Our Twelve Traditions 14,662 31,902 54,485 Voices of Women in AA 67,174 85,779 Making Amends 21,863 58,716 AA in the Military 33,551 Frente A Frente 26,531 One Big Tent 63,977 All others1 320,458 308,174 305,312 337,881 422,426 Other Publishing Revenue – Slide 51 – S 1 835,099 766,660 692,114 811,075 782,088 1Includes sales of E-Books in $20,659; 2017 – $19,965; 2016 – $21,436; 2015 – $25,324; and 2014 – 29,419. Slide 51 – Support 2 – lists the principle titles from Grapevine’s other content producing activities, which earned total revenue of $835,099 in That was an increase of $68,439, or 8.9%, due to three new titles in 2018, compared to two new titles in The slide shows the very popular titles of “The Language of the Heart” and “Emotional Sobriety” continue to be the largest sellers. The key take away is the inevitable decline in sales of older publications absent advertising and promotion and why it is necessary to continually offer new publications, such as “AA in the Military,” “Frente A Frente” and “One Big Tent” in 2018 to replace the dramatic fall-off in older books, such as “Making Amends” in 2017, “Our Twelve Traditions” in 2016, “Forming True Partnerships” and “Happy, Joyous & Free” in The single largest title represents 13.0% of total other publishing revenue and the total of the thirteen (13) titles listed represent 61.6% of the total revenue earned. E-Books represent 2.5% of sales. 51 – S 2

GV GROSS PROFIT ANALYSIS – 5 YEAR HISTORY 2018 2017 2016 2015 2014 Average Circulation: Print 66,857 69,249 71,811 71,966 74,000 Online & App 5,443 6,010 5,618 5,233 5,262 Total 72,300 75,259 77,429 77,199 79,262 Gross Profit on: Magazines $1,321,696 $1,393,955 $1,449,248 $1,418,247 $1,529,061 Other Content Publishing Activities 562,438 537,742 455,898 550,581 509,303 Total Gross Profit 1,884,134 1,931,697 1,905,146 1,968,828 2,038,364 % Other Content Publishing Activities to Total Gross Profit 29.9% 27.8% 23.9% 28.0% 25.0% Slide 51 – Support 3 – calculates the percentage contribution of Other Content Publishing Activities to total Gross Profit for each of the five years ended December 31, For 2018, the percentage was 29.9%, compared to 27.8% for This percentage will generally continue to increase over time as revenues from the Grapevine magazine continue to decline, while revenues from other content publishing activities remain at current levels or increase. 51 – S 3

GRAPEVINE – 2018 ACTUAL VS 2018 BUDGET
69th General Service Conference AVERAGE CIRCULATION – PRINT 66,857 62,322 4,535 ONLINE & APP 5,443 5,780 (337) $ in Thousands 2018 ACTUAL BUDGET Increase (Decrease) Magazine Revenue 1,978 1,841 137 Magazine Direct Costs (656) (600) 56 Gross Profit on Magazine 1,322 1,241 81 Other Publishing Revenue 835 731 104 Cost of Goods Sold (273) (221) 52 Gross Profit on Other Publishing Items 562 510 Total Gross Profit 1,884 1,751 133 Costs and Expenses Editorial Costs 658 754 (96) Circulation and Business 1,026 1,033 (7) General and Administrative 380 255 125 Total Costs and Expenses 2,064 2,042 22 Interest Income 31 20 11 Net Income (149) (271) 122 Slide 51 – Support 4 – compares 2018 actual results to 2018 budget. The actual loss of $149,167 was better by a $122,146 than the budgeted loss of $271,313 due to an improvement of approximately $133,000 in revenues from increased magazines sales and other content producing activities compared to budget, offset by actual operating expenses being $22,000 higher than budget.

GRAPEVINE OPERATING RESULTS – 2004 – 2018
69th General Service Conference Slide 51a – displays the net profit or loss of Grapevine since It should be highlighted that the 2018 operating results of a loss of $149,167 would have been essentially breakeven, if not for the inclusion of severance payments of $126,303 and related legal expenses. The positive results of $315,205 in 2013, $325,827 in 2014, $240,811 in 2015, $164,539 in 2016 allowed GV to contribute to the Reserve Fund an aggregate $800,000. Since 1978, Grapevine has contributed aggregated cumulative funds of $1,373,200 against aggregated cumulative withdraws of $1,447,300.

GRAPEVINE – 2019 BUDGET In Thousands
69th General Service Conference GRAPEVINE – 2019 BUDGET In Thousands Slide 52 – compares 2018 actual results to 2019 budget. Most importantly, it must be pointed out that the 2019 budget is prepared on a different basis than prior year budgets. In prior years, the projections of magazine circulation and revenue were prepared by our third-party circulation consultant considering only the natural decay rate of magazine renewals. These numbers were not adjusted for any efforts by GV to generate new subscriptions through programs, such as “Carry the Message.” The 2019 budget has been adjusted to include an additional add-on of 5% to 6% to reflect the anticipated positive impacts of various staff changes and the initiatives being planned in 2019 to increase circulation. The positive additional net subscription revenue of these actions is $91,000.

GRAPEVINE – 2019 BUDGET AVERAGE CIRCULATION – PRINT 69,139 66,857 2,282 ONLINE & APP 6,947 5,443 1,504 $ in Thousands 2019 BUDGET 2018 ACTUAL Magazine Revenue 2,096 1,978 118 Magazine Direct Costs (683) (656) 27 Gross Profit on Magazine 1,413 1,322 91 Other Publishing Revenue 957 835 122 Cost of Goods Sold (304) (273) 31 Gross Profit on Other Publishing Items 653 562 Total Gross Profit 2,066 1,884 182 Costs and Expenses Editorial Costs 801 658 143 Circulation and Business 1,183 1,026 157 General and Administrative 236 380 (144) Total Costs and Expenses 2,220 2,064 156 Interest Income 20 (11) Net Income (134) (149) 15 Slide 52 – Support 1 – compares 2018 actual results to 2019 budget. There is a positive change from a 2018 actual loss of $149,167 to a 2019 budgeted loss of $134,559, an improvement of $14,608. This improvement is due to a projected 5.2% increase of 3,786 magazine subscriptions. Most importantly, it must be pointed out that the 2019 budget is prepared on a different basis than prior year budgets. In prior years, the projections of magazine circulation and revenue were prepared by our third-party circulation consultant considering only the natural decay rate of magazine renewals. These numbers were not adjusted for any efforts by GV to generate new subscriptions through programs, such as “Carry the Message.” The 2019 budget has been adjusted to include an additional add-on of 5% to 6% to reflect the anticipated positive impacts of various staff changes and the initiatives being planned in 2019 to increase circulation. The positive additional revenue of these actions is $91, budgeted operating expenses are $156,000 greater than 2018 actual expenses. GV projected net loss – 2020 – ($24) & $9

La Viña – AVERAGE Circulation – 2004 – 2018
69th General Service Conference Slide 53 – shows the subscription levels for our Spanish language magazine, La Viña, for the last 15 year, with 2018 having average magazine subscriptions of 9,635, down 361, or 3.6%, from 2017.

LA VIÑA – STATEMENT OF ACTIVITIES
69th General Service Conference LA VIÑA – STATEMENT OF ACTIVITIES Average Circulation 9,635 9,996 10,374 2018 2017 2016 REVENUE Magazine 120,520 121,973 119,882 Related Items 20,305 29,118 32,895 Total Revenue 140,825 151,091 152,777 Cost of Goods Sold (60,090) (56,603) (77,910) Gross Profit 80,735 94,488 74,867 COSTS AND EXPENSES Editorial Costs 142,252 133,985 133,413 Circulation and Business 80,968 81,896 86,437 General and Administrative 5,982 5,047 7,099 Total Costs and Expenses 229,202 220,928 226,949 Shortfall between Revenue and Expenses (148,467) (126,440) (152,082) Support from GSB General Fund – Slide 31 NET 148,467 - 0 - 126,440 152,082 Slide 54 – shows the La Viña service activity, both subscription levels and operating results. The key is that the yearly shortfall between revenues earned and the related costs of this service activity continues to be covered through a transfer from the General Service Board’s General Fund as this shortfall is considered a service to the Fellowship per the General Service Conference. For 2018, the shortfall between revenue and expenses of $148,467, compared to $126,440 in 2017 and $152,082 in 2016. Report on La Viña Reporting – A Second Subcommittee on La Viña Reporting was formed at the October 28, 2017 Trustees Finance Committee meeting. It presented its Final Report to the General Service Board on January 29, The Report discussed how financial information should be changed to more clearly help the Fellowship understand the service nature of the La Viña activity and how it is to be presented. The Report was accepted by the GSB. These changes have been reflected in this finance presentation: - Include in the General Service Office financial information a reference to the support of the La Viña service activities (see Slide 30 – Support 1; Slide 31; and Slide 31 – Support 1); - No longer show cumulative losses of La Viña; and - Continue to present a statement of La Viña publishing activities (this Slide shows that). La Viña projected shortfall – $165,838; $162,578 & $159,691

SHORTFALL BETWEEN PENSION PLAN LIABILITIES AND ASSETS
69th General Service Conference SHORTFALL BETWEEN PENSION PLAN LIABILITIES AND ASSETS PENSION LIABILITIES 2018 – 35.2 M 2017 – 36.9 M 2016 – 35.2 M Slide 55 – shows that the discounted defined benefit plan’s projected benefit obligation (PBO) was $35,238,092 at December 31, 2018, using a discount rate of 4.21%. The gross undiscounted PBO are nearly $90 million, which are expected to be paid out over the next 90 years through (See Slide 57 – Support 7 for future benefit payments.) Remember that when a stream of future liability payments, such as pension payments, is discounted back to its present value, an increase in the discount rate will have the counter intuitive impact of decreasing the liability balance. Pension plan assets decreased to $33,059,042 at December 31, 2018 from $34,770,101 at December 31, This is a net decrease of $1,711,059, or 4.9%, resulted from: increase of $1,500,000 from the annual pension plan contributions made by the operating entities, decrease of $1,652,075 from the pension benefit payments made to plan participants, decrease of $2,153,015 in plan assets due to a 6.2% decline in the general stock market, net increase of $594,031 from dividend income less plan expenses. PENSION ASSETS 2018 – 33.1 M 2017 – 34.8 M 2016 – 29.9 M PENSION FUND

SHORTFALL BETWEEN PENSION PLAN LIABILITIES AND ASSETS 69th General Service Conference Slide 56 – shows the shortfall between pension plan liabilities and pension plan assets for the last five years. The liability decreased to $35,238,092 at December 31, 2018 from $36,894,234 at December 31, This decrease of $1,656,142, or 4.5%, was due to an increase in the interest rate used to discount the pension liabilities from 3.55% at December 31, 2017 to 4.21% at December 31, Remember that when a stream of future liability payments, such as pension payments, is discounted back to its present value, an increase in the discount rate will have the counter intuitive impact of decreasing the liability balance. During 2017, A.A. offered certain plan participants that are both vested and terminated the opportunity to take a lump-sum buyout of their pension benefits. Seventeen (17) people accepted the offer reducing the total pension liability by $634,554 during See Slide 57 – Support 9. Pension plan assets decreased to $33,059,042 at December 31, 2018 from $34,770,101 at December 31, This is a net decrease of $1,711,059, or 4.9%, during Plan Assets were $34,770,101 at December 31, 2017, a net increase of $4,857,715 over This net amount resulted from the increase of $1,500,000 of annual pension plan contributions made by the operating entities, the increase of $1,250,000 transfer from the Reserve Fund (approved by the General Service Board in July 2017), the 14.8% increase in plan assets of $4,419,518 due to general stock market gains, reduced by pension benefit payments made to plan participants during the year of $2,311,803, which included $634,554 of payments due to the lump-sum buyout.

PENSION PLAN ASSETS – 2018 – $33.1 MILLION 69th General Service Conference Slide 57 – shows the major asset classes that the $33,059,042 of pension plan assets at December 31, 2018 were invested in. Assets are invested in Vanguard mutual funds that mirror the general stock and bond markets. Domestic equities (a combination of S&P 500, Mid Cap and Small Cap) were 54.0%, international equities were 10.8%, bonds were 32.4% and cash equivalents were 2.8%. Pension plan assets decreased to $33,059,042 at December 31, 2018 from $34,770,101 at December 31, This is a net decrease of $1,711,059, or 4.9%, which resulted from: increase of $1,500,000 from the annual pension plan contributions made by the operating entities, decrease of $1,652,075 from the pension benefit payments made to plan participants, decrease of $2,153,015 in plan assets due to a 6.2% decline in the general stock market, net increase of $594,031 from dividend income less plan expenses.

PENSION PLAN ASSETS – 2017 – $34.8 MILLION 69th General Service Conference Slide 57 – Support 1 – is the slide from the 68th GSC Finance Presentation repeating 2017 information for reference purposes. It shows the major asset classes that the $34,770,101 of pension plan assets at December 31, 2017 were invested in. Assets are invested in Vanguard mutual funds that mirror the general stock and bond markets. Domestic equities (a combination of S&P 500, Mid Cap and Small Cap) were 56.9%, international equities were 12.0%, bonds were 28.4% and cash equivalents were 2.7%. Plan Assets were $34,770,101 at December 31, 2017, a net increase of $4,857,715 over This net amount resulted from the increase of $1,500,000 of annual pension plan contributions made by the operating entities, the increase of $1,250,000 transfer from the Reserve Fund (approved by the General Service Board in July 2017), the 14.8% increase in plan assets of $4,419,518 due to general stock market gains, reduced by pension benefit payments made to plan participants during the year of $2,311,803, which included $634,554 of payments due to the lump-sum buyout.

Defined benefit plan and defined CONTRIBUTION plan
69th General Service Conference Defined benefit plan and defined CONTRIBUTION plan Defined Benefit (DB) Plan created January 1, 1965 Employees earn increasing benefit based on salary and length of service Existing employees continue to earn benefits while employed Defined Contribution (DC) Plan created January 1, 2013 New employees hired after January 1, 2013 no longer covered by DB Plan, but are covered by DC Plan where they receive a 5% benefit, plus a 50% match on employee contributions up to 5%. Maximum contribution rate is 7.5%. Special actuarial study conducted in 2016 and reconfirmed that change from DB to DC resulted in DB savings of over $300,000 in 2016 Slide 57 – Support 1a – In 1965, A.A. established a traditional Defined Benefit (DB) Pension Program for its employees who have completed one year of service. The plan provides an annual benefit equal to 2% of final average compensation multiplied by years of service (not to exceed 35 years), less 0.65% of average social security earnings multiplied by years of service (not to exceed 30 years). The social security offset can not reduce the gross benefit by more than 50%. Pension cost are accrued ratably over an employee’s years of service. This plan will continue to exist until the last eligible employee who is covered retires and then eventually passes away. See Slide 57 – Support 5 through Slide 57 – Support 7 for details. Pension benefits that have already been accrued cannot be changed. Pension costs are funded out of current operations and now account for about 7.6% of recurring operating expenses ($1,500,000 out of $19,736,206), down from 12% in 2013 ($2,105,000 out of $16,879,552). (Slide 57 – Support 12). To cap this exposure, A.A. transitioned from a Defined Benefit Plan to a Defined Contribution Plan for all new A.A.W.S. and GV employees hired subsequent to January 1, Under the DC Plan, the contribution rate is 5% plus a 50% match on employee contributions up to 5%. Therefore, the maximum contribution rate is 7.5%. See Slide 58 and Slide 58 – Support 1. Over the long-term, this change will cap the DB plan and reduce ongoing costs.

PENSION PLAN Generally Accepted Accounting Principles (GAAP) ASC 715 or Statement of Financial Accounting Standards 87 — Accounting for Post-Retirement Benefits, as amended Discount rate – 4.21% at 12/31/2018 ERISA & Internal Revenue Code Pension Protection Act (PPA) Minimum Funding Requirements in Moving Ahead for Progress in the 21st Century Act (MAP-21) Highway and Transportation Funding Act of 2014 (HATFA) amended Pension Protection Act (PPA) Bipartisan Budget Act of 2015 (BBA) Slide 57 – Support 2 – outlines some of the rules under generally accepted accounting principles and federal government regulations that the Defined Benefit Plan is subject to and provides a transition to details of the pension plan included in the next several slides. Underlying these rules are the mortality assumptions. Over the last several years, the American Academy of Actuaries have made changes to the mortality tables to project longer life times, which lengthen pension annuity payment periods and increase the pension liability. Also, the passage of the original Pension Protection Act and admonitions from our Independent Auditors brought to the forefront the need to maintain adequate funding of our pension plan and was one of the motivations for the Reserve Fund transfers and the change from a Defined Benefit Plan to a Defined Contribution Plan.

TRANSFERS FROM RESERVE FUND TO PENSION FUND IN:
69th General Service Conference TRANSFERS FROM RESERVE FUND TO PENSION FUND IN: $1.5 MILLION – 2014 $1.3 MILLION – 2017 Slide 57 – Support 3 – illustrates the 2014 transfer of $1,500,000 and the 2017 transfer of $1,250,000 from the Reserve Fund to the Pension Plan Fund and provides a transition into the rationale underlying the transfer described in Slide 57 – Support 4. Reserve Fund Pension Fund

Impact of two Transfers from Reserve Fund to Pension Fund
69th General Service Conference Impact of two Transfers from Reserve Fund to Pension Fund 2014 transfer saved GSO & GV significant operating expense by lowering their cash pension contributions from $2,105,000 in 2013 to $1,500,000 in 2018 A.A.W.S.: ~ net saving 2013 compared to 2018 is approximately $498,000 AAGV: ~ net saving 2013 compared to 2018 is approximately $40,000 2017 transfer likely means there should be no need to increase future cash pension costs 2019 cash pension costs budgeted to continue at $1.5 million per year Slide 57 – Support 4 – lists the benefits that arose from the 2014 transfer of $1.5 million from the Reserve Fund to the Pension Plan. The transfer had the positive impact for both operating entities of lowering cash pension costs to $1,500,000 from $2,105,000 in 2013; specifically, saving approximately $498,000 for A.A.W.S. and $40,000 for Grapevine each year. The purpose of the 2017 transfer of $1,250,000 was to further reduce the possibility of a future funding shortfall, that is, where there is a need to use existing plan assets to pay benefits versus using the annual cash dividends and interest received from the assets of approximately $500,000 per year, plus the annual amount of $1,500,000 being contributed by the operating entities to cover the yearly pension benefit payments to plan participants of more than $1,800,000 to $2,000,000 per year in the next decade (Slide 57 – Support 7). Assuming there are no dramatic stock market events in the short-term, then the operating entities budgeted pension expense of $1,500,000 should continue to be at this level for the next several years.

PENSION PLAN INFORMATION
69th General Service Conference PENSION PLAN INFORMATION 2018 2017 2016 2015 2014 Active Employees 51 52 65 75 84 Disabled 4 3 2 1 - Vested & Terminated 24 45 41 38 Retirees & Beneficiaries 93 95 88 74 Total 172 195 196 198 199 $ in Thousands Total Valuation Payroll 4,640 4,416 5,010 5,575 6,138 Average Payroll per Employee 85 77 73 Projected Benefit Obligation 35,238 36,894 35,159 33,848 36,054 Cash Pension Costs included in Operating Expense 1,500 1,567 1,690 Total Benefits Paid 1,652 1,677 1,534 1,572 1,189 Slide 57 – Support 5 – provides details of the size and complexion of the defined benefit plan. It shows the number of active employees (51 in 2018 compared to 52 in 2017) and both retirees and vested and terminated (117 in 2018 compared to 140 in 2017) covered along with the related average salary and the projected benefit obligation (PBO). The number of vested and terminated participants declined from 2017 to 2018 due to the lump-sum buyout during See Slide 57 – Support 8 for details. The plan participant numbers are as of the beginning of the year, while financial numbers are as of year-end. The key take away is that the number of retirees is continuing to increase and, accordingly, benefits payments continue to increase. Such payments have increased 38.9% to $1,652,075 in 2018 over the $1,189,353 in At the bottom of the slide are the projected benefit payments for the next 5 years, assuming all eligible plan participants elect to receive benefits in the year, for example, in 2019, the amount would increase to $1,813,253. See Slide 57 – Support 7. These future benefits payable amounts are projected to be greater than the cash contributions being put into the plan so if future market returns (i.e., dividends and interest) from the pension plan assets are not robust enough to make up the difference, we could be in a situation where we might need to increase future pension contributions. Plan participants are as of the beginning of the year. Estimated benefit payment over next 5 years: $1,813,253; $1,829,640; $1,858,920; $1,912,602; $1,962,456

PROJECTED PENSION BENEFIT OBLIGATION
69th General Service Conference PROJECTED PENSION BENEFIT OBLIGATION $ in Thousands 2018 2017 2016 2015 2014 Discount Rate 4.21% 3.55% 4.05% 4.26% 3.89% Projected Benefit Obligation (PBO) - 1/1 36,894 35,159 33,848 36,054 27,658 Service & Interest Costs 1,847 1,941 2,019 2,164 2,024 Pension Benefits Paid (1,652) (2,312) 2 (1,534) (1,572) (1,189) Actuarial (Gains)/Losses (1,851) 2,106 826 (2,798) 7,561 Projected Benefit Obligation (PBO) - 12/31 35,238 Plan Assets - 1 /1 34,770 29,912 27,789 27,848 24,089 Return on Plan Assets (1,559) 4,420 2,090 (54) 1,759 Employer Contributions 1,500 2,7501 1,567 3,1901 Plan Assets - 12/31 33,059 Net Unfunded (PBO less Plan Assets) 12017 includes $1.25 million and 2014 includes $1.5 million transfer from Reserve Fund 22017 includes $635 thousand lump-sum buyout offer (2,179) (2,124) (5,247) (6,059) (8,206) Slide 57 – Support 6 – reconciles the “ins and outs” of the pension plan liabilities at the top of the slide and the pension plan assets at the bottom. This slide shows the volatility that determine annual pension expense. During 2018, the discount rate increased from 3.55% to 4.21%, which resulted in a decrease of $1,656,142 in the projected benefit obligations from $36,894,234 at December 31, 2017 to $35,238,092 at December 31, The rate is determined from the Citigroup Above Median Double-A Interest Rate Curve and the Plan’s expected future cash flows as of the measurement date discounted to yield a single equivalent discount rate. Pension plan assets decreased to $33,059,042 at December 31, 2018 from $34,770,101 at December 31, This is a net decrease of $1,711,059, or 4.9%, which resulted from: increase of $1,500,000 from the annual pension plan contributions made by the operating entities, decrease of $1,652,075 from the pension benefit payments made to plan participants, decrease of $2,153,015 in plan assets due to a 6.2% decline in the general stock market, net increase of $594,031 from dividend income less plan expenses.

PENSION PLAN CASH INFLOWS* VERSUS CASH OUTFLOWS * - Excludes One-time Reserve Fund Transfers Slide 57 – Support 6a - shows pictorially the cash inflows and cash outflows of the pension plan and why it is necessary to continue to make annual contributions to the plan to cover the benefit payments. See Slide 57 – Support 7 for the next ten years of projected benefit payments. When the net cash flows is positive, this amount is then available for additional growth of the pension assets, beyond general stock market appreciation. 57 – S 6a

PENSION BENEFIT PAYMENTS (PAST vs. future)
69th General Service Conference Slide 57 – Support 7 – shows actual pension benefits paid out for the years 2012 through 2018, along with a projection of expected pension benefits for the years 2019 through The 2018 pension benefits paid out was $1,652,075. The 2017 amount of $1,677,249 excludes the $634,554 of payments made related to the lump-sum buyout. The key takeaway is how benefit payments continue to grow as more of the existing work force reaches retirement age over the next several years. In 2019, the pension benefit payments are expected to be $1,813,253, assuming every eligible participant elects to take their vested benefits, increasing to $2,226,588 in 2026.

TOTAL LUMP-SUM PAYOUT - $634,554 LUMP-SUM OFFERS ACCEPTED – 17 AVERAGE AGE OF PARTICIPANT ACCEPTING – 51.5 AVERAGE LUMP SUM AMOUNT – $38,663 SUMMARY – AGE RANGE SUMMARY – LUMP-SUM PAYMENTS RANGE OF TOTAL LUMP-SUM PAYMENT TOTAL ELIGIBLE NUMBER ACCEPTED UNDER $25,000* 13 7 $25,000 - $50,000 17 4 $50,000 - $75,000 8 $75,000 - $100,000 2 TOTAL PARTICIPANTS 40 RANGE OF TOTAL LUMP-SUM PAYMENT TOTAL ELIGIBLE NUMBER ACCEPTED AGE 3 2 AGE 11 5 AGE 18 8 AGE * TOTAL PARTICIPANTS 40 17 Slide 57 – Support 8 – is the slide from the 68th GSC Finance Presentation repeating 2017 information for reference purposes. This slide provides the summary demographics by salary ranges and age ranges for the 40 eligible plan participants, along with the 17 people who voluntarily elected to exercise their option to take the lump-sum buyout. Total lump-sum buyout payments were $634,554 for the 17 people. * - Hypothetical plan participant on Slide 57 – Support 9 would be in these demographics.

CALCULATION OF LUMP-SUM PAYOUT OF HYPOTHETICAL VESTED AND TERMINATED PLAN PARTICIPANT Date of Birth – 5/01/1953 Date of Hire – 10/10/2000 Date of Termination – 5/15/2006 Normal Retirement – 6/1/2018 Salary History – $31,900 $29,200 $29,800 $28,700 $29,700 $27,800 Final Average Compensation – $29,800 Years of Service – 5 Monthly Accrued Benefit – $127 per month after social security offset Lump-sum Benefit – $19,200 at December 1, 2017 Slide 57 – Support 9 – is the slide from the 68th GSC Finance Presentation repeating 2017 information for reference purposes. As shown on Slide 57 – Support 5, there were 45 vested and terminated plan participants that are entitled to pension benefit payments once they reach retirement age. For each of these 45 participants, A.A. must pay yearly insurance premiums to the Pension Benefit Guaranty Corporation (PBGC), along with keeping track of them until benefit payments begin. As illustrated in this slide for a hypothetical plan participant, the monthly benefit payment can be very small for a former employee that only worked for A.A. for a very short time, but long enough to become vested. For a variety of sound operational and financial reasons, the Retirement Committee and the Boards of the operating entities decided to offer a lump-sum buyout option to certain eligible vested and terminated plan participants. See Slide 57 – Support 8 for the demographic of the 40 eligible vested and terminated participants. 57 – S 9

Slide 57 – Support 10 – shows the breakdown of the post-retirement medical liability for the last five years. At December 31, 2018, the total retiree medical liability was $6,836,634, composed of $3,204,717 for 67 current employees and $3,631,917 for 49 retirees. It should be noted that the retiree medical liability is now being calculated by our actuaries, instead of being done by our finance team due to the growing complexity of the calculations. The retiree medical liability declined from $7,373,680 at December 31, 2017 to $6,836,634 at December 31, 2018 due to the discount rate increasing. It should also be pointed out that the discount rate used for the retiree medical liability of 4.26% is different than the discount rate used for the defined benefit plan of 4.21%, as required under generally accepted accounting principles. A.A. continues to focus on our long-term obligations for post-employment commitments to current employees and retirees, for postretirement medical benefits. At the March 2016 board meetings of both A.A.W.S. and GV, the Boards decided to eliminate paying for the cost of post-retirement medical benefits for any new employee hired after June 30, 2016 to begin to reduce our on-going expense for this benefit. TOTAL $6, $7, $7, $7, $7,253 57 – S 10

PENSION & POST-RETIREMENT MEDICAL OBLIGATIONS ($ in Millions) Obligations1 Funded2 Unfunded3 12/31/2018 12/31/2017 Pension 35.2 36.9 33.1 34.8 2.1 Medical 6.8 7.4 5.5 1.3 1.9 42.0 44.3 38.6 40.3 3.4 4.0 Slide 57 – Support 11 – shows the long-term liabilities and assets held that are earmarked for both pensions and postretirement medical benefits, and the resulting net unfunded status. During 2018, the net unfunded exposure decreased from $4.0 million at December 31, 2017 to $3.4 million at December 31, This decrease of $0.6 million was net of a decrease of $2.3 million in obligations caused by the interest rate used to discount the retirement obligations increasing from 3.55% at December 31, 2017 to 4.21% at December 31, 2018 ($42.0 million – 2018 versus $44.3 million – 2017), offset by a decrease of $1.7 million in the assets held. See Slide 57 – Support 10 for details of Retiree Medical Plan liabilities. Note: 1Pension discount rate increased from 3.55% in 2017 to 4.21% in This interest rate increase resulted in the combined Obligations decreasing by $2.3 million from 2017 to 2018. 2From 2017 to 2018, the combined Funded Status decreased by $1.7 million. 3From 2017 to 2018, the combined Unfunded Status decreased by $0.6 million. 57 – S 11

PERCENTAGE COMPONENTS OF RETIREMENT EXPENSE 7 YEAR HISTORY
69th General Service Conference $ in Thousands 2018 2017 2016 2015 2014 2013 2012 Total Retirement Expense – Slide 24 – S 1 2,024 1,984 1,971 1,893 2,041 2,429 2,112 Defined Benefit Plan Expense – Slide 57 – S 5 1,500 1,567 1,690 2,105 1,812 Defined Contribution Plan Expense – Slide 58 – S 1 194 186 109 66 48 25 - Percentage of Each Individual Expense to Total Retirement Expense: - Defined Benefit Plan 74.1% 75.6% 79.5% 82.8% 86.7% 85.8% - Defined Contribution Plan 9.6 9.4 5.5 2.7 2.3 1.0 ----- Retiree Medical Plan Funding – (GSO – $225 & GV – $26) 12.4 12.7 13.3 12.3 10.3 11.9 - Pension Benefit Guarantee Corporation Insurance Payment .6 .7 .5 .4 1.5 1.7 - Other (Lump-sum Payments, Fees, etc.) 3.3 1.6 2.2 Total 100.0 Slide 57 – Support 12 – breaks down total retirement expense of $2,024,342 (Slide 24 – Support 1) and shows the percentage that the Defined Benefit (DB) Plan expense on Slide 57 – Support 5 and Defined Contribution (DC) Plan expense on Slide 58 – Support 1 are to the total retirement expense. For completeness, the remaining percentages of each of the other retirement related expenses are provided. For 2018, DP plan is 74.1% of the total. Note that: The transfer of $1.5 million from the Reserve Fund to the DB Plan occurred in This transfer resulted in the decrease in the percentage of DB Plan expense to total expense from 86.7% in 2013 to 82.8% in A further positive benefit was that our mandatory insurance payments to the federal government’s Pension Benefit Guarantee Corporation also declined by $25,000 - $30,000 per year, resulting in the percentage of the PBGC expense to total expense decreasing by 1%. The DC Plan started in 2013 and shows the percentage of the DC expense to total retirement expense has increased from zero in 2012 to $194,105, or 9.6%, in 2018 as all new employees hired are now covered by the DC Plan. See Slide 58 – Support 1.

RETIREMENT EXPENSE DEFINED BENEFIT PLAN & DEFINED CONTRIBUTION PLAN 7 YEAR HISTORY Slide 58 – shows the expense of the Defined Benefit (DB) Plan and the Defined Contribution (DC) Plan for the last seven years. In 2018, the DB Plan was $1,500,000 and the DC Plan was $194,105. The DC Plan began January 1, See Slide 57 – Support 5 for DB Plan details. See Slide 58 – Support 1 for DC Plan details.

DEFINED CONTRIBUTION PLAN 6 year history
69th General Service Conference DEFINED CONTRIBUTION PLAN 6 year history AAWS Participants GV Participants 5% Employer Contribution 2.5% Matching Contribution Total Expense 2013 7 - $20,820 $4,419 $25,239 2014 10 37,543 10,384 47,927 2015 13 3 51,698 14,715 66,413 2016 25 83,975 24,968 108,943 2017 38 140,958 45,436 186,394 2018 35 138,930 55,175 194,105 Slide 58 – Support 1 – shows the growth of the Defined Contribution Plan since its inception January 1, At December 31, 2018, there are 38 participants, costing $194,105. The number of participants and the related costs will continue to grow as new employees are hired to replace employees who either leave or retire. However, the growth of the Defined Contribution retirement expense will be less than if the Defined Benefit Plan had been continued.

RESERVE FUND RATIO Number of months that the Reserve Fund would cover combined operating expenses Slide 59 – defines the Reserve Fund Ratio as the number of months that the Reserve Fund could cover the recurring operating expenses of the two operating entities. See Slide 23, “Understanding 2018 Total Expenses,” to understand which expense amounts are used for this calculation.

GENERAL SERVICE OFFICE 69th General Service Conference F E L O W S H I P G S B R E V F U N D Contributions G.S.O. Cash Flow Excess Special Projects Operating Shortfalls Literature Slide 59 – Support 1 – shows the relationships between the Fellowship, General Service Office and the Reserve Fund. To pay its bills and fund its obligations, GSO has only two sources of money; contributions and literature sales. At the end of each year, any cash not necessary to pay bills on time is transferred to the Reserve Fund. For 2018, GSO did not contribute to the Reserve Fund in early 2019 since its 2018 operating profits were only $394,681. For 2017, GSO contributed and transferred $1,400,000 to the Reserve Fund in early 2018 as a results of 2017 operating profits of $1,758,839. For 2016, GSO contributed and transferred $1,200,000 to the Reserve Fund in early 2017 as a results of 2016 operating profits of $1,453,218.

GRAPEVINE F E L O W S H I P G S B R E V F U N D G.V. Cash Flow Excess Subscriptions Other Publishing Special Projects Operating Shortfalls Slide 59 – Support 2 – shows the relationships between the Fellowship, Grapevine and the Reserve Fund. To pay its bills and fund its obligations, Grapevine has only one source of money; the sale of magazine subscriptions and other content items. At the end of each year, any cash that is more than is necessary to pay bills on time is transferred to the Reserve Fund. Since Grapevine had negative operating results in 2018, it did not contribute to the Reserve Fund. Grapevine had positive operating results during the period 2013 through These positive results during those years have allowed GV to contribute a total of $800,000 to the Reserve Fund. Most recently GV contributed from its 2016 earnings $40,000 in early 2017 and from its 2015 earnings $240,000 in early See Slide 51a for a 15 year history of operating results. Since 1978, Grapevine has contributed aggregated cumulative funds of $1,373,200 against aggregated cumulative withdraws of $1,447,300.

USES OF GSB’s RESERVE FUND
69th General Service Conference Concept of GSB’s Prudent Reserve – not same as in your Home Group’s reserve GSB’s Reserve Fund covers much more Operating shortfalls between revenues and expenses Capital construction projects Lease guarantees Pension obligations Retirement medical obligations Litigations and legal liabilities Any other unknowns Slide 59 – Support 3 – lists some of the reasons why the Reserve Fund exists. 59 – S 3

RESERVE FUND 2019 Budget 2018 2017 2016 2015 Reserved Fund – ($ in Thousands) $15,832 $15,935 $14,353 $14,959 $14,584 Recurring Operating Expenses – Slide 23 20,127 19,736 18,059 $17,410 $17,075 Number of months covered 9.4 9.7 9.5 10.3 10.2 Groups 68,478 66,860 66,336 65,741 Reserve Fund per Group $230.92 $232.71 $214.67 $225.50 $221.84 Members 1,418,177 1,381,954 1,362,402 1,348,072 Reserve Fund per Member $11.15 $11.24 $10.39 $10.98 $10.82 Slide 60 – shows the balance of the Reserve Fund, operating expenses and Reserve Fund Ratio for the last four years and the 2019 budget. At December 31, 2018, the Reserve Fund Ratio is 9.7 months. See Slide 61 for the twenty year history of the Reserve Fund Ratio. See Slide 60 – Support 2 for investment guidelines. The Reserve Fund is currently invested in various banks’ certificates of deposit. At the bottom of this slide, the balance of the Reserve Fund is converted into an equivalent Reserve Fund balance per group and per member. The 2018 amounts of $ per group and $11.24 per member are the amounts that are frequently used around the picnic table. By Conference action, the “Prudent Operating Reserve” was defined as an amount equal to the preceding year’s combined operating expenses of A.A. World Services, A.A. Grapevine and the General Fund of the General Service Board. Operating expenses include “office and operating expenses” and do not include the Cost of Products or Manufacturing cost. 60

RECONCILIATION OF RESERVE FUND RATIOS
69th General Service Conference $ in Thousands RESERVE FUND EXPENSES RATIO 2017 Actual – Slide 23 – S 2 14,3531 18,059 9.5 2017 Pro forma Actual 15,7532 10.5 2018 Budget 15,6113 19,230 9.7 2018 Actual – Slide 23 – S 2 15,9354 19,736 2019 Budget 15,8325 20,127 9.4 1Balance includes contribution of $1,200,000 from AAWS and $40,000 from GV arising from 2016 profits made in early 2017 less $2,000,000 transfer to Retirement and Medical Plans made in August 2017. 2Balance includes contribution of $1,400,000 from AAWS arising from 2017 profits made in early 2018. 3Balance includes contribution of $1,400,000 from AAWS and withdrawals of $142,000 by GV/LV during 2018. 4Balance includes actual withdrawal of $44,000 by GV and LV for capital projects during 2018. 5Balance includes carryover of withdrawal of budgeted $103,000 by GV and LV for its capital projects during 2019. Slide 60 – Support 1 – is a reconciliation of the Reserve Fund Ratio from the actual 2017 through 2019 budget. Refer to footnote 1 on Slide 23 – Support 2 for the recurring operating expenses. Starting with 2017 Actual, the Reserve Fund had a balance of $14,352,618 and recurring operating expenses were $18,059,041 resulting in a ratio of 9.5 months. If we assume that the transfer of the $1,400,000 from GSO for its 2017 operating profits could have occurred before December 31, 2017 so the Reserve Fund would have had a hypothetical $15,752,618 (instead of $14,352,618), then the pro forma actual ratio would have been 10.5 months at December 31, For the 2018 budget, we started with the Reserve Fund at December 31, 2017 of $14,352,618, added the $1,400,000 from GSO made in early 2018, for a Reserve Fund of $15,752,618. The Reserve Fund was reduced for the $142,000 of capital projects approved for Grapevine and La Vina. Recurring operating expenses were budgeted to be $19,230,000 in This yielded a budgeted Reserve Fund Ratio of 9.7 months. Starting with 2018 Actual, the Reserve Fund had a balance of $15,935,331 and recurring operating expenses were $19,736,206 resulting in a ratio of 9.7 months. During 2018, the Reserve Fund was reduced by the $44,000 out of the anticipated $142,000 of capital projects approved for Grapevine and La Vina. The remainder will be moved into 2019, along with an increase of $5,000 for the La Vina’s capital project. For the 2019 budget, recurring operating expenses are projected to be $20,127,000 and the Reserve Fund of $15,832,000, resulting in a ratio of 9.4 months. The Reserve Fund has been reduced for the remaining $103,000 of capital projects approved in 2018 for Grapevine and La Vina.

RESERVE FUND Reserve Fund Balance December 31, 2018 – $15,935,331 – Annual earnings – $226,713 December 31, 2017 – $14,352,618 – Annual earnings – $153,884 INVESTMENT GUIDELINES “Minimum Requirement” To assure the liquidity, the Reserve Fund shall contain investment instruments having maturities of one year or less in an amount equal to the sum of (a) the unearned Grapevine subscription liability and (b) the operating cash requirements of the service entities. This amount will be reviewed annually by the trustees’ Finance and Budgetary Committee. “No More Than” The balance of the Reserve Fund shall be invested in instruments with maturities of between zero (0) and ten (10) years, provided that at no time shall more than 50% of the principal amount of such balance consist of investments having maturity dates of five or more years. Reserve Fund Policy Investment Review At its October 31, 2016 meeting the General Service Board accepted the recommendation that no change in the investment philosophy be undertaken, based on the Report of a Subcommittee of trustees’ Finance and Budgetary Committee. Slide 60 – Support 2 – summarizes the investment guidelines of the Reserve Fund and shows the balance of $15,935,331 and annual interest earned of $226,713 in 2018, compared to $14,352,618 and annual interest of $153,884 in These guidelines limit the types of eligible investments, resulting in a low rate of return of about 1.5%. In July 2016, Trustees’ Finance Committee formed a Subcommittee to review the existing investment policy and whether it should be changed. After reviewing the issues, the Subcommittee reported back to Trustees’ Finance that the existing policy should be retained. This Report was forwarded to the General Service Board, who accepted the recommendation at their October 31, 2016 meeting.

RESERVE FUND RATIO NUMBER OF MONTHS COVERAGE 1999 – 2018
69th General Service Conference RESERVE FUND RATIO NUMBER OF MONTHS COVERAGE – 2018 Slide 61 – shows the Reserve Fund ratio for the last 20 years. At December 31, 2018, the ratio is 9.7 months, up from 9.5 months at last year-end. The ratio is currently within the recommended range of 9 and 12 months.

2019 BUDGET* 69th General Service Conference $ - in Thousands GSO AAWS GV La Viña 2019 BUDGET 2018 ACTUAL REVENUE Net Sales 14,775 3,053 143 17,971 16,974 Contributions 8,385 Interest 20 31 TOTAL REVENUE 3073 26,376 25,390 EXPENSES Cost of Good Sold 5,000 987 61 6,048 5,556 Operating (Program & Supporting) Expenses 11,431 6,228 2,220 248 20,127 19,736 TOTAL EXPENSES 11,228 3,207 309 26,175 25,292 NET INCOME (LOSS) (3,046) 3,547 (134) (166) 201 98 RESERVE FUND at December 31 15,832 15,935 Operating Expenses Number of months coverage 9.4 9.7 *- Excludes Nonoperating Funds – Reserve, Capital Projects, Pension, Postretirement Medical Benefits Slide 62 - is the 2019 budgets for each of the operating entities. The combined net profit for 2019 is projected to be $201,000, compared to net profit of $97,047 in 2018.

GSO & AAWS – 2019 BUDGET $ in Thousands 2019 GSO BUDGET PUBLISHING BUDGET 2018 Slide 7 – S 1 & Slide 30 – S 1 PUBLISHING Slide 41 – 1 REVENUE Net Sales $14,775 $14,020 Contributions $8,385 TOTAL REVENUE 8,385 14,775 14,020 EXPENSES Cost of Goods Sold 5,000 4,567 Operating (Program & Supporting) Expenses 11,431 6,228 11,427 6,016 TOTAL EXPENSES 11,228 10,583 NET INCOME (LOSS) OPERATIONS (3,046) 3,547 (3,042) 3,437 Slide 62 – Support 1 is Slide 48 repeated for reference purposes. It shows a budgeted net income of $501,000 in 2019 compared to an actual net income of $394,681 in Budgeted publishing revenues and the related costs of goods sold and shipping are $800,000 higher than 2018 actual due to the publication of the new book, “Our Great Responsibility 1951 – 1970.” The budget includes 100,000 units and $800,000 of gross revenue for this new book. When the 2019 publishing profit of $3,547,000 is combined with the 7th Tradition of $8,385,000, along with the cost of services of $11,431,000, a budgeted net profit of $501,000 results. Further, assuming that there are no changes in the way business is conducted or 7th Tradition of self-support does not increase, then this 2019 budgeted net profit is projected to become a smaller budgeted net profit of $449,000 in 2020 and declining to a budgeted net profit of $54,000 in 2021. $501 $395 GSO/AAWS combined projected net profit in 2020 – $449 & net profit in 2021 – $54.

AAWS – PUBLISHING – 2019 BUDGET $ in Thousands 2019 BUDGET 2018 ACTUAL INCREASE (DECREASE) Gross Sales 15,000 14,235 765 Less – Discounts allowed 225 215 (10) Net Sales – Literature 14,775 14,020 755 Cost of Literature Sold 3,100 2,799 301 Direct Shipping and Warehousing 1,900 1,768 132 Gross Profit 9,775 9,453 322 Gross Profit Percentage 66.2% 67.4% (1.2%) Operating (Program & Supporting) Expenses 6,228 6,016 212 Net Operating Income 3,547 3,437 110 Slide 62 – Support 2 – is Slide 48 – Support 1 repeated for reference purposes. It compares 2018 actual results with the 2019 budget for A.A.W.S. Budgeted publishing revenues and the related costs of literature sold and shipping are greater than 2018 actual due to the publication of the new book, “Our Great Responsibility 1951 – 1970.” The budget includes 100,000 units and $800,000 for this new book. GSO/AAWS combined projected net profit in $501; net profit in $449 & net profit in 2021 – $54. 62 – S 2

GRAPEVINE – 2019 BUDGET AVERAGE CIRCULATION – PRINT 69,139 66,857 2,282 ONLINE & APP 6,947 5,443 1,504 $ in Thousands 2019 BUDGET 2018 ACTUAL Magazine Revenue 2,096 1,978 118 Magazine Direct Costs (683) (656) 27 Gross Profit on Magazine 1,413 1,322 91 Other Publishing Revenue 957 835 122 Cost of Goods Sold (304) (273) 31 Gross Profit on Other Publishing Items 653 562 Total Gross Profit 2,066 1,884 182 Costs and Expenses Editorial Costs 801 658 143 Circulation and Business 1,183 1,026 157 General and Administrative 236 380 (144) Total Costs and Expenses 2,220 2,064 156 Interest Income 20 (11) Net Income (134) (149) 15 Slide 62 – Support 3 is Slide 52 – Support 1 repeated for reference purposes. It compares 2018 actual results to 2019 budget. There is a positive change from a 2018 actual loss of $149,167 to a 2019 budgeted loss of $134,559, a decline of $14,608. This decline is due to a projected 5.2% increase of 3,786 magazine subscriptions. Most importantly, it must be pointed out that the 2019 budget is prepared on a different basis than prior year budgets. In prior years, the projections of magazine circulation and revenue were prepared by our third-party circulation consultant considering only the natural decay rate of magazine renewals. These numbers were not adjusted for any efforts by GV to generate new subscriptions through programs, such as “Carry the Message.” The 2019 budget has been adjusted to include an additional add-on of 5% to 6% to reflect the anticipated positive impacts of various staff changes and the initiatives being planned in 2019 to increase circulation. The positive additional revenue of these actions is $91, budgeted operating expenses are $154,000 greater than 2018 actual expenses. GV projected net loss – 2020 – ($24) & $9

2020 Budget Outlook and Trends
69th General Service Conference 2020 Budget Outlook and Trends Net Results ($ in Thousands) 2018 ACTUAL 2019 BUDGET 2020 BUDGET 2021 BUDGET GSO/AAAWS Slide 48 395 501 449 54 Grapevine Slide 52 (149) (134) (24) 9 La Viña Slide 54 (148) (166) (163) (160) Total 98 201 262 (97) Reserve Fund Ratio (months) Slide 60 9.7 9.4 GSO/AAWS Membership levels remain flat Contributions show small growth Literature sales show small growth – 1% per year Expenses continue to grow slowly – 2% - 3% per year GRAPEVINE Subscriptions decline – 2% - 3% per year 2020 & 2021 Budget Outlook GSO/AAWS, Grapevine, and La Viña combined budgeted results is $262,000 profit in 2020, with following year having small loss, assuming no changes in contribution levels and operating expenses Slide 63 – summarizes the preliminary budget outlook for the next three years and trends shows a combined operating profit of $201,000. The combined results show a profit of $262,000 in 2020 and a minor loss in 2021 of $97,000. All three Boards are committed to finding ways not to have these negative outcomes.

2020 INTERNATIONAL CONVENTION
69th General Service Conference 2020 INTERNATIONAL CONVENTION Detroit 2020 Budget Atlanta 2015 San Antonio 2010 Toronto 2005 Attendees 47,500 56,900 52,383 42,500 Advanced Registration Fee per Person (U.S. $) $115 $100 $95 $85 Revenue 5,583,218 5,929,138 5,212,650 3,919,332 Stadium 1,446,571 1,372,060 1,030,473 783,089 Convention Center 1,267,830 1,175,341 650,570 682,308 Busing 1,548,869 939,693 820,115 All other 2,804,119 2,043,299 1,747369 1,672,860 Total costs 5,518,520 6,139,569 4,368,105 3,958,372 Net 64,698 (210,431) 844,545 (39,040) Slide 64 – compares the budget of the 2020 International Convention in Detroit to the actual results of Atlanta (2015), San Antonio (2010) and Toronto (2005). The 2020 International Convention is estimating 47,500 attendees at an advanced registration fee of $115 per person and registration fee of $140 after April 15, This will generate revenues of $5,583,218, the costs of hosting the event are expected to be $5,518,520, resulting in a budgeted profit of 64,698, or 1.2% of revenues. 64

THE CONVENTION FUND 69th General Service Conference A separate fund established to record the direct income and expenses of international A.A. Conventions held every five years. These events are separate from the regular operations of the General Service Office, but the General Fund receives any excess of income, or pay any excess of expense, resulting from the activity. From a historical perspective, the net direct results of all Conventions held to date is approximately an excess of income of $1,350,000, and presently resides with all other income not required in the Reserve Fund. YEAR LOCATION PROFIT/(LOSS) 2015 Atlanta (210,431) 2010 San Antonio 844,545 2005 Toronto (39,040) 2000 Minneapolis 997,580 1995 San Diego (632,027) 1990 Seattle 181,029 1985 Montreal 315,940 1980 New Orleans (202,950) 1975 Denver 82,991 1970 Miami 15,809 1965 12,948 1960 Long Beach (456) 1955 St. Louis (15,994) Total 1,349,944 Slide 64 – Support 1 – provides the historical results of the thirteen (13) international conventions held since the first in 1955 in St. Louis, and shows a net profit of $1,349, As background, Footnote 1 of the Consolidated Financial Statements of the General Service Board, which are included in the final Conference Report, reads as follows: “The Convention Fund – A separate fund established to record the direct income and expenses of international A.A. conventions held every five years. These events are separate from regular operations of the General Service Office, but the General Fund receives any excess of income, or pays any excess of expense, resulting from the activity. From a historical perspective, the net direct result of all conventions held to date is approximately an excess of income of $1,350,000, and presently resides with all other income not required for working capital in the Reserve Fund.” 64 – S 1

THANK YOU All of employees of both A.A.W.S. and Grapevine Members of Trustees’ Finance and Budgetary Committee, along members of the Finance Committees of A.A.W.S. and Grapevine Our Independent Auditors – Marks Paneth, LLP ************ Any questions – Please feel free to contact me at – Slide 65 – I want to acknowledge the extraordinary talent and dedication that I am privileged to observe as treasurer. Thank you to the members of Trustees Finance, along with the members of the finance committees of both operating entities. Thank you to Greg Tobin and Ami Brophy (now Albin Zezula) for competently overseeing our operating entities. Thank you to Bob Slotterback and Daniel Pensante and our talented and dedicated A.A.W.S. and Grapevine finance teams. Finally, a special thanks to our Independent Auditors, Marks Paneth, LLP, who exhibited professionalism and independence at all times. Their audit report and the audited consolidated financial statements will be contained in the Final Conference Report. And remember, Finance has no importance in and of itself. Finance is simply a way to help carry the message to the still-suffering alcoholic. Thank you. David Morris, treasurer, General Service Board. 65

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