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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 MeetingSunday - January 25, 2009Denver, CO

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BARC REPORT

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

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Budget Analysis and Review Committee

BARC Report to Council – FY 2008 Results

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Consolidated Balance Sheet SummaryAssets & Liabilities

$ %

2008 2007 Change Change

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 $ 1,151,226 3.5%

Member Equity* $ 516.56 $ 513.90 $ 2.66 0.5%

*Net Assets/Membership - FY08 Membership increased from 64,729 to 66,624 (2.9%)

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$ %

2008 2007 CHANGE CHANGE

Revenues $ 57,799,373 $ 48,419,344 $ 9,380,029 19.4%

Expenses $ 54,477,022 $ 46,940,370 $ 7,536,652 16.1%

Gross Operating Income $ 3,322,351 $ 1,478,974 $ 1,843,377 124.6%

Less: Postretirement Benefits $ 244,201 $ 1,283,488 $ (1,039,287) -81.0%

Net Operating Income $ 3,078,150 $ 195,486 $ 2,882,664 1474.6%

Consolidated Summary of OperationsRevenues & Expenses

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ALA Total Revenues - 2008

Grants & Awards$11,804,822

20.4% Other$2,754,410

4.8%

Interest & Dividends

$1,612,030 2.8%

Contributions$1,775,598

3.1%

Products & Promotions$2,025,389

3.5%

Meetings & Conferences

$12,976,134 22.5%

Publishing*$16,006,614

27.7%

Dues $8,844,376

15.3%

*Includes Sales of Books and Materials, Subscriptions and Advertising

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$8,8

44,3

76

$4,8

14,5

77

$5,0

84,1

05

$6,1

07,9

32 $12,

976,

134

$2,0

25,3

89

$11,

804,

822

$1,7

75,5

98

$2,7

54,4

10

$1,6

12,0

30$4,9

45,8

34

$2,6

00,3

06

$1,6

13,8

85

$1,1

91,2

19

$5,4

49,3

98

$2,2

32,6

13

$10,

991,

212

$5,9

95,4

46

$5,1

47,0

99$8,2

52,3

32

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

2008 2007

2008 = $57,799,373 2007 = $48,419,344

ALA Statement of Operations(Revenues)

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ALA Statement of Operations(Expenses)

$1

9,89

5,78

4

$

1,31

0,16

7

$

8,20

7,83

1

$

5,54

2,65

4

$7,

482,

135

$3,7

78,4

40

$

9,57

0,17

8

$19,

028,

828

$7,1

10,4

96

$2,2

32,9

93 $6,

488,

498

$5,5

94,4

26

$6,4

85,3

09

$1,

283,

488

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

PAY ROLL OUTSIDE SERVICES TRAVEL MEETINGS ANDCONFERENCE

PUBLICATIONS OPERATING POST RETIREMENTBENEFITS

2008 2007

2008 = $55,787,189 2007 = $48,223,858

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General Fund Summary(Revenues & Expenses)

$ %

2008 2007 Change 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 $ 207,920 44.0%

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Division Summary(Revenues & Expenses)

$ %

2008 2007 Change Change

Division Revenues $ 16,008,255 $ 13,089,018 $ 2,919,237 22.3%

Division Expenses $ 14,444,106 $ 12,655,273 $ 1,788,833 14.1%

Net Revenue $ 1,564,149 $ 433,745 $ 1,130,404 260.6%

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Budget Analysis and Review Committee

BARC Report to Council - Budget Update

Three Months Ended 11-30-08

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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

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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%)

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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%)

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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%)

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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.