1. System Financial Health Round Robin Meetings

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

3. TOTAL SYSTEM REVENUES HAVE GROWN SLOWLY AND DECLINED RECENTLY Public Television Revenues, 1997-2005 $ Billions Source: AFR Total Revenue Annual Growth Rate, 97-02: 5.9%* * Compound Annual Growth Rate. Total Revenue Annual Growth Rate, 02-05: -2.8%*

4. THOUGH CAPITAL FUNDS HAVE GROWN AT A FAST RATE, THEY HAVE PLAYED A SMALL ROLE IN TOTAL REVENUES Public Television Revenues and Capital Funds Contributions, 1997-2005 $ Millions Source: AFR Capital Funds 7.5 % Annual Growth Rate* Non-operational Operational Capital Funds *Growth rate from ’99-’05

5. 5.5% MEMBERSHIP, BUSINESS & STATE FUNDING HAVE ALL GROWN SLOWLY Source: AFR Total Operational Revenues, 1997 and 2005 $ Millions Membership/Fundraising Major Giving/Endowment** Foundation Businesses Local/State 1.3% 33.0% 1.4% 1.0% $1409 $1585 Growth Rate* Total Operational Revenues 1.5% * Inflation in this same period is 2.3% annually ** Major giving growth rate is 1998-2005 Federal 5.8% Other -6.4% University -0.2%

6. TOTAL FEDERAL FUNDING IS THE LARGEST SOURCE OF REVENUE THAT IS GROWING IN REAL DOLLARS Source: AFR Total System Revenues Indexed to 2005 CPI, 1997 and 2005 $ Millions $1714 Growth Rate * Major giving growth rate is 1998-2005 $1585 2.9% Membership/Fundraising Major Giving/Endowment* Foundation Businesses Local/State -1.2% 29.0% -1.1% -1.4% Total Operational Revenues -1.0% Federal 3.2% Other -8.7% University -2.6%

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

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

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

10. EMPLOYMENT LEVELS HAVE RETURNED TO 1990s LEVELS Public Television Full-time Employment, 1995-2005 Source: 1995-2002 AFR, 2003-2005 SABS

11. Source: SABS EMPLOYEES ARE CONCENTRATED IN PRODUCTION AND CONTENT, DELIVERY & DISTRIBUTION (CD&D) FTEs per Functional Area, 2004-2005 2005 2004 Corp. Mgt & Support Develop- ment Auction Under- writing Program- ming Production CD&D Education & Outreach Marketing/ CRM

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

13. ‘Cost per Dollar’ depictions exclude any allocated costs from the Corporate Management and Support, and other station areas. FUNDRAISING COSTS IN THE SYSTEM GREW SLIGHTLY FROM 2004 TO 2005. 2005 2004 Source: SABS Membership (gifts < $1K) Major Giving (gifts ≥ $1K) Planned Giving (realized) Spot/Run of Scheduling Underwriting Auction Average Fundraising Cost per Dollar Raised, 2004-2005

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

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