1. Report from the Society Committee on Budget & Finance
September 11, 2013
Indianapolis, IN

2. Budget & Finance Committee 2013 Probable Year-End Projection
Net from Operations - $14.5M
$1.3M Favorable
Total Revenues - $491.8M
$7.6M (-1.5%) Unfavorable
Total Expenses - $477.2M
$8.9M (1.8%) Favorable
Board Financial Guidelines
Compliance with four of five guidelines anticipated

3. 3-year rolling average of free cash flow > 0
Financial Guidelines
Guideline
Target
2013
Probable 1
Current Ratio
0.65x target
Debt Ratio
50% maximum
3-year rolling average of free cash flow > 0
This slide summarizes how the Society is projected to end the year in terms of compliance with the five Board-approved financial guidelines.
Rather than provide specific calculated amounts for each guideline…which is difficult to do at this point in the year…we’ve moved to a simple color-coded system for the P1 Projection – green, yellow and red. The green dot indicates we anticipate full compliance with the target… yellow means compliance is at risk; and red indicates we expect to violate the guideline.
As you can see, we expect to satisfy the first four guidelines, Current Ratio; Debt Ratio; Free Cash Flow; and Sustainability.
The one guideline where we are not anticipating compliance is the Fund Balance Guideline….which is a measure of the adequacy of the Society’s Unrestricted Net Assets. ACS ended 2012 with UNA of $101 million and a Fund Balance Ratio of 21%. As you’ve seen on the previous slide, as of July 31, 2013, UNA is up to $186 million which equates to a Fund Balance Ratio of 38%, but still below the 50% Minimum. We would need to reach ~$245 million in UNA by December 31 to comply with the guideline. It’s certainly possible…but we think unlikely. [CLICK]
Free Cash Flow
2.5% - 5.0%
ROR target
Sustainability
Fund Balance Ratio
50% minimum
American Chemical Society

4. Unrestricted Net Assets 2009 – 2012 Actuals; est
Unrestricted Net Assets 2009 – 2012 Actuals; est. at July 31, 2013 ($ in Millions)
Net from Operations – P $ 14.5M
Investment Gains M
PRBP Changes M
Net Increase $ 84.9M
This slide shows the recent trend in UNA. For 2013, we’ve brought together in the blue call out box the three factors that I’ve just covered -- Projected Net from Operations (+$14.5M); investment gains (+$15.0M); and a reversal of Postretirement Benefit Plan (PRBP) charges from previous years (+$55.3M). These total $84.9M million raising unrestricted assets from $101 million at YE 2012 to approximately $186M at July 31.
(Note: at August 31 = ~$180M).
(click)
Note: Excludes the Member Insurance Program and the ACS Petroleum Research Fund. 4
American Chemical Society

5. Budget & Finance Committee Program Funding Requests
ACS Entrepreneurial Initiative
National Association of Chemistry Teachers
ACS International Center (Reauthorization)
SciMind (Reauthorization) 5 5

6. Program Funding Requests Net Expenses6