Internet2 All Staff Meeting November 29, 2001 Financial Review

Some FAQs About Our Financials  Where does our funding come from or who pays the freight?  What is our current financial position?  How does the budget work?  What’s the budget plan for 2002?  What is the financial viability of Internet2 in these challenging times and will Internet2 be doing any layoffs?  What can I do to help?

Who Pays the Freight? Members Dues-Regular Affiliate Corporate Total Meeting Fees Abilene Fees-Connection Participation SEGP Total Grant Income Interest / Investment Income Total Revenues * 000’s omitted 2001*2002* $4,625$4, ,3101,200 $6,515$6,535 $153$180 8,48010,305 3,5974, $12,224$15, $19,639$23,096

What is Our Current Financial Position? Assets Total Current Assets Total Property and Equipment Total Other Assets Total Assets Liabilities and Net Assets Total Current Liabilities Total Long-Term Liabilities Total Liabilities Net Assets Unrestricted Net Assets Total Liabilities and Net Assets * 000’s omitted Balance Sheet as of 10/31/01* $23, $24,195 $6,517 0 $6,517 $17,678 $24,195

Consolidated Budget EQUALS Core budget + Projects budget + Abilene budget How Does the Budget Work?

Administration Applications (General, Arts & Humanities & Health Sciences) Communications Corporate Engineering Federal International Membership Middleware  Core budget made up of the following functions:

How Does the Budget Work?  Project budget made up of the following projects: Applications: Commons, Oxford/UKERNA, NEES End to End Performance Expanded Access Tech Transfer Middleware: Directories, PKI, Shibboleth

 Core and project budgets funded by member dues, meeting fees, grants, interest and investment income, overhead charge to Abilene and core reserves or net assets  Abilene budget made up of Backbone Infrastructure function and parts of time of others  Abilene funded by connection, participation, SEGP fees and Abilene reserves or net assets How Does the Budget Work?

Budget FY'01 Consolidated 35% 6% 1% 8% 21% 3% 20% Proposed Budget FY'02 Consolidated 34% 4% 1% 9% 22% 6% 20% Total Meeting Total Personnel Total Travel Printing, publication, multi-media Office Support Abilene Network Total Total Other Total Capital Expenditures Distribution of Expenses by Category

Distribution of Expenses by Area Abilene Allocated Administration Applications Communications Corporate Engineering Federal International Membership Middleware Applications Projects End to End Performance Expanded Access Tech Transfer Middleware Projects Grants Proposed Budget FY’02 ConsolidatedBudget FY’01 Consolidated

What’s the Budget Plan for 2002?  Let’s look at net assets or reserves and how they play out in 2002 Consolidated*Core/Projects* Balance 1/1/02 Revenue-Expenses Balance 1/1/03 14,106 (6,665) 7,441 Abilene* 7,900 (3,100) 4,800 6,206 (3,565) 2,641 * 000's omitted

What is the Financial Viability of Internet2 in These Challenging Times and will Internet2 be Doing any Layoffs?  Solid financial footing today  Net loss of corporate members YTD 2001  Increases in Abilene participation and connectivity  Breadth and depth of projects increasing with commensurate increases in staff and related expenses

 For the first time, in 2002 our net assets or reserves will be used to fund ongoing activities both in the core/project and Abilene areas... this was the plan What is the Financial Viability of Internet2 in These Challenging Times and will Internet2 be Doing any Layoffs?

What Can You Do to Help?  Grow and create new funding Identify and help sign up new members Help us think through the value and pricing of our memberships Encourage corporate members to move up to sponsorship and partnership levels Help us rationalize the right fees for meeting attendance Stay alert to and pursue grant funding sources Think about fee for service opportunities – help develop business plans to get them going

What Can You Do to Help?  Control expenses Be flexible and help out across the organization Plan early and thoughtfully for trips – can one or two represent us instead of three of four? Speak up about cost saving ideas Treat Internet2’s resources as if they were your own

Internet2 All Staff Meeting November 29, 2001 Operations Update

Prioritized Activities  Leadership / communication  Human resources Hire the best Benefits administration for 2002 updated Launch administrative support team Enhance performance and salary review processes Review holiday policy Rationalize titles Update description of roles and responsibilities for all staff Promulgate CSFs to all staff

Prioritized Activities (cont.)  Information Technology Provide outstanding support and service Complete projects on schedule Provide technical support to iMIS member database project Support other technical requirements across the organization

Prioritized Activities (cont.)  Financial management Board approval of 2002 budget Prepare for 2001 audit Clean up accounts receivable Implement new billing and collection processes Administer grants effectively

Prioritized Activities (cont.)  Refine working group guidelines and administration  Develop and execute revenue generation plans  Update travel guidelines  Refine software and distribution and support guidelines

Challenges / Opportunities  Fill approved open positions ASAP  Provide assistance in all functional areas  Continue to assimilate new staff well  Maximize communication / information flow  Balance process improvement with empowerment / flexibility / nimbleness  Very prudently manage resources  Maximize support for staff and members

How Can You Play a Role in Operations?  Communicate Tell us what you need Don’t fret No surprises Share ideas on how to do things better and/or preserve resources

How Can You Play a Role in Operations?  Help new folks get off to a good start  Be prudent  Be patient  Be positive  Participate when asked or proactively volunteer