1. MAINE HUMANITIES COUNCIL Maine Humanities Council 1 Financial Overview Presented by: Don Gaudet RUNYON KERSTEEN OUELLETTE Recently, Maine Humanities Council completed the financial audit process. We are pleased to report that the Council received an unqualified “clean” opinion. Simply, this means that Maine Humanities Council’s financial statements are fairly presented in all material respects. Congratulations on this accomplishment. The remainder of this publication is dedicated to providing you with the results of the audit. We hope you find this information useful and understandable. Finally, we wish to express our appreciation to Erik, Mary and all the other members of the Council’s staff who were so helpful to us during the audit process. INSIDE 1. Assets 2. Liabilities and Net Assets 3-4. Revenues 5-6. Expenses 7. Ratio Analysis and Closing Remarks SUMMARY OF SIGNIFICANT CHANGES Decrease in cash of $163,000 is due to the timing of cash receipts and disbursements close to year end as well as a shift out of cash and into investments. Investments increased by $494,000 due to better market returns and fewer unrestricted funds being transferred over to cash. Of the $245,000 increase in receivables, $200,000 pertained to a contribution to the Dorothy Schwartz Opportunity Fund from the River Rock Foundation. Decrease in property and equipment of around $14,000 is caused by another year’s worth of depreciation expense. Prepaid expenses and deposits remained flat with the prior year. FINANCIAL STATEMENT PRESENTATION October 31, 2006 ASSETS KEY PERFORMANCE INDICATORS

2. MAINE HUMANITIES COUNCIL Maine Humanities Council 2 SUMMARY OF SIGNIFICANT CHANGES The changes in both regrants payable and accounts payable are both due to the timing of the payment of invoices close to year end. Increase in accrued expenses of $2,700 is due to more days needing to be accrued of the final pay period of the year. The net increase in deferred revenue of $122,000 is driven by the following: - State regrants $163,000 - State tech. fund ($21,000) - LTAI ($29,500) LIABILITIES NET ASSETS SUMMARY OF SIGNIFICANT CHANGES  Net investment in PP&E decreased by $14,000 due to another year’s worth of depreciation. Temporarily restricted net assets represent funds that have been restricted by outside donors for a specified purpose or the passage of time. Most of the increase is due to nearly $267,000 of contributions to the Dorothy Schwartz Opportunity Fund. Permanently restricted net assets increased by $79,000 due to the earnings on the respective investment accounts. Undesignated net assets represents what’s left over after backing out the other classifications.

3. MAINE HUMANITIES COUNCIL Maine Humanities Council 3 REVENUES SUMMARY OF SIGNIFICANT CHANGES National Endowment for the Humanities (NEH) grants increased by $226,000 due to additional base grant funding. Other grants increased by a net of $92,500 due to a second Teaching American History Grant totaling $111,500 and fewer State Technology Funds being used of around ($19,000). Of the $282,000 net increase in contributions & gifts, $267,000 came from donations to the Dorothy Schwartz Opportunity Fund. Net investment income increased by $63,000 due to a higher investment base and stronger market conditions. Program income decreased by $13,400 due to fewer programs and one less conference being offered in the current year. Increased in-kind revenue is driven by the following: – Lit. & Med.$205,000 – Thoughtful Giving $102,000 – Let’s Talk About It$ 24,000 – New Books New Readers$ 8,800

4. MAINE HUMANITIES COUNCIL Maine Humanities Council 4 REVENUES, CONTINUED 2006 2005

5. MAINE HUMANITIES COUNCIL Maine Humanities Council 5 EXPENSES BY NATURAL CATEGORY SUMMARY OF SIGNIFICANT CHANGES Personnel increased by $58,832 due to higher overall salaries and related payroll benefits. Higher consultants is driven Hawthorne & Longfellow, which increased by $86,000 in 2006, and TAH #1 and #2, which together had a net decrease of ($5,200). Increased in-kind expenses corresponds to the higher in-kind revenues mentioned earlier. Reserve for uncollectible accounts of $50,000 pertains to management’s conservative effort to account for any market risk that may result in a drop from the original $250,000 pledge. Increase in travel of around $47,000 can be broken down as follows: – Lit. & Med. Seminar$13,500 – Hawthorne & Longfellow$11,700 – TAH #1$ 7,000 – TAH #2$ 9,400 – Other $ 8,800 The major components behind the increase in other expenses is broken down as follows: – Supplies $ 21,300 – Printing & Publications $ 28,100 – Postage $ 5,250 – Repairs & Maintenance($ 14,200)

6. MAINE HUMANITIES COUNCIL Maine Humanities Council 6 EXPENSES BY FUNCTION 2006 2005

7. MAINE HUMANITIES COUNCIL Maine Humanities Council 7 FINAL WORDS This presentation is intended as a tool to assist the Board of Directors and management of Maine Humanities Council in understanding its financial operating results. The information contained in this publication should be read in conjunction with the audited financial statements and related disclosures and should not be used for any other purposes without the expressed consent of RUNYON KERSTEEN OUELLETTE Please contact us at 207-773-2986 or 1-800-486-1784 20 Long Creek Drive, South Portland, ME 04106 FINAL WORDS This presentation is intended as a tool to assist the Board of Directors and management of Maine Humanities Council in understanding its financial operating results. The information contained in this publication should be read in conjunction with the audited financial statements and related disclosures and should not be used for any other purposes without the expressed consent of RUNYON KERSTEEN OUELLETTE Please contact us at 207-773-2986 or 1-800-486-1784 20 Long Creek Drive, South Portland, ME 04106 RATIO ANALYSIS