1. 1 BUDGET ANALYSIS AND REVIEW COMMITTEE BARC Report to Council Jim Neal BARC Chair for 2008-09 2008-09 CD #33.0 2008-09 Midwinter Meeting Midwinter Meeting Sunday - January 25, 2009 Denver, CO

2. 2 BARC REPORT Fiscal Year 2008 Results Fiscal Year 2009 First Quarter Strategic Financial Planning Electronic Member Participation Role of BARC

3. 3 Budget Analysis and Review Committee BARC Report to Council – FY 2008 Results

4. 4 Consolidated Balance Sheet Summary Assets & Liabilities $% 20082007Change Assets $ 67,923,868 $ 68,037,036 $ (113,168)-0.2% Liabilities $ 33,508,284 $ 34,772,678 $ (1,264,394)-3.6% Net Assets $ 34,415,584 $ 33,264,358 $ 1,151,2263.5% Member Equity* $ 516.56 $ 513.90 $ 2.660.5% *Net Assets/Membership - FY08 Membership increased from 64,729 to 66,624 (2.9%)

5. 5 $% 20082007 CHANGE Revenues $ 57,799,373 $ 48,419,344 $ 9,380,02919.4% Expenses $ 54,477,022 $ 46,940,370 $ 7,536,65216.1% Gross Operating Income $ 3,322,351 $ 1,478,974 $ 1,843,377124.6% Less: Postretirement Benefits $ 244,201 $ 1,283,488 $ (1,039,287)-81.0% Net Operating Income $ 3,078,150 $ 195,486 $ 2,882,6641474.6% Consolidated Summary of Operations Revenues & Expenses

6. 6 *Includes Sales of Books and Materials, Subscriptions and Advertising

7. 7 ALA Statement of Operations (Revenues)

8. 8 ALA Statement of Operations (Expenses)

9. 9 General Fund Summary (Revenues & Expenses) $% 20082007 Change General Fund Revenues $ 28,026,732 $ 28,441,697 $ (414,965)-1.5% General Fund Expenses $ 27,346,587 $ 27,969,472 $ (622,885)-2.2% Net Operating Revenue $ 680,145 $ 472,225 $ 207,92044.0%

10. 10 Division Summary (Revenues & Expenses) $% 20082007 Change Division Revenues $ 16,008,255 $ 13,089,018 $ 2,919,23722.3% Division Expenses $ 14,444,106 $ 12,655,273 $ 1,788,83314.1% Net Revenue $ 1,564,149 $ 433,745 $ 1,130,404260.6%

11. 11 Budget Analysis and Review Committee BARC Report to Council - Budget Update Three Months Ended 11-30-08

12. 12 Three Month Highlights Total ALA Revenue - $11.1 million - Less than budget by $266,617 Total ALA Expenses - $12.6 million - Less than budget by $780,392 ALA Net Revenue – (-$1.5 million) (-25.2%) - This is the typical Revenue/Expense/Net pattern for this time period Cash and Investments - $19.3 million Endowment Fund - $22.6 million - Down from $31.3 million (27.7%) - The General stock market* down 38.5% *S&P 500 index

13. 13 Three Month Highlights Total Assets - $60.7 million - Less than November 2007 by $8.8 million (-12.7%) - Lower due in part to lower accounts receivable balances and a lower investment balance in response to market conditions Total Liabilities - $36.6 million - Less than November 2007 by $224,552 (0.6%) Net Assets – $24.1 million - Less than November 2007 by $9.1 million (-27.3%)

14. 14 Three Month Highlights General Fund Revenue - $4.8 million - Less than budget by $649,780 (-12.0%) - Less than the same time FY07 by $378,575 (-7.4%) - Dues income @$1.5 million is more than budget by $23,355 (1.6%), due to a 2% increase in membership – primarily students & staff support - Publishing revenue @ $2.9 million less than budget by $663,078 (- 18.6%), due to an aggressive budget in ALA Editions, lower advertising in Booklists, lower sales related to library promotions in Products & Promotions General Fund Expenses - $6.1 million - Less than budget by $658,210 (-9.7%) - More than the same time FY07 by $30,235 (0.5%)

15. 15 Three Month Highlights - Annual Conference expenses are under budget by $111,850 (-53.1%) - Midwinter Meeting expenses are under budget by $103,525 (-31.6%) Due to timing issues additional expenses are being processed - Professional services are over budget by $190,794 - Salary saving for the period total $480,312, which compares to savings (attrition) budgeted at $156,694 General Fund Net Revenue Loss – (-$1.3 million) - Right on the budget target of (-$1.3 million) (-0.6%)

16. 16 Role of BARC To review the proposed budget, as forwarded by the ALA Executive Board, in the context of the ALA strategic plan, annual priorities and budget assumptions; to review the financial performance of the Association and the budget impact of potential actions of ALA Council; to make budget recommendations to the ALA Executive Board and to report to Council regarding budget analysis and process.