1. Report from the Society Committee on Budget and Finance
American Chemical Society
Report from the Society Committee on Budget and Finance
August 22, 2018
Boston, Massachusetts
Good afternoon. Thank you for making time on your busy agenda for this brief report from the Society Committee on Budget & Finance.
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2. 2018 Probable 1 Projection Highlights
Net from Operations – $31.8M
$1.3M favorable to Budget
Total Revenues – $565.1M
$5.7M (1.0%) favorable to Budget
Total Expenses – $533.3M
$4.4M (0.8%) unfavorable to Budget
Note: Excludes the ACS Petroleum Research Fund, ACS subsidiaries and the Member Insurance Program. 2

3. 2018 Probable 1 Projection * Net from Operations ($ in Millions)
Information Services
Investments
Net Dues
All Other **
Governance
Web Strategy & Operations
Society Programs
Net From Operations
We’ll now transition to a Division or Programmatic summary of the 2018 Probable 1 Projection.
This slide is a traditional Sources and Uses chart that captures the Society’s major sources of net contribution…purple bars at the top pointing to the right; and net expense – shown here in several colors pointing to the left.
The top bar, labeled Information Services (which contains CAS and Publications), demonstrate the importance of these two Information Services divisions to the Society’s overall financial health. As I noted earlier, the two divisions account for 91% of total ACS revenue; and CAS and Pubs are projected to generate net contributions of $83M in 2018.
Investments are projected to generate $11.4M from dividend and interest income. This does not include investment gains -- which are reported as a non-operating activity on the Society’s income statement.
The next for bars total ~$101.4 – and are used to fund ~$47M in Society Programs (shown here in blue); the net expenses for Governance and Web Strategy & Operations, as well as the negative Net Dues (net expense of approx. $800K. [Total dues revenue is projected at $14.8M --- but after bylaw required allocations to Local Sections, Divisions, C&EN, and other expenses (i.e., Member Services) this is the net remaining]; Governance and Web Strategy & Operations.
What remains at the bottom of the chart is the projected $31.8M Net from Operations.
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* Note: Excludes ACS International, Ltd., Hampden Data Services, Ltd., ACS Petroleum Research Fund, and the Member Insurance Program.
** Note: All Other includes the Development Office and Unallocated Indirect Costs. 3

4. 3-year rolling average of free cash flow > 0
Financial Guidelines
Guidelines
Targets
2018
Probable 1
Current Ratio
0.65x target
Debt Ratio
50% maximum
N/A
3-year rolling average of free cash flow > 0
Free Cash Flow
4.0% - 8.0%
ROR target
Sustainability
Fund Balance Ratio
50% minimum
This slide summarizes how the ACS is projected to end 2018 in terms of compliance with the five Board-approved financial guidelines.
As you can see by the colored dots on the right, we expect to satisfy four of these five guidelines.
The fifth guideline… the Debt Ratio… indicates that, as of today, the Society has no debt.
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5. Unrestricted Net Assets 2014 – 2017 Actuals; est. at July 31, 2018
($ in Millions)
P1 Net from Ops $ M
Net Investment Gains M
PRBP Credit M
Total Increase $ M
This last slide reflects the Society’s current financial position at July 31. The blue call out box recaps the key factors that account for the change in the Society’s financial position since YE 2015 (in terms of Unrestricted Net Assets).
Focusing on the box, you can see through the first 7 months of 2018 – Net from Operations (+$31.8M); investment gains of ($6.3M); and a partial reversal of previously recorded accounting charges (+$19.5M) associated with our Postretirement Benefit Plans (PRBP), net to an increase in Unrestricted Net Assets of $57.6M – bringing the total to ~$342M.
Note: It’s too early/too difficult to make accurate YE projections – since the position will be significantly impacted by changes in interest rates and the capital markets (investments). Nevertheless, the upward trend is encouraging – as the Society’s financial position has shown
The Fund Balance Guideline requires a Minimum of about $265M in UNA.
Mr. Chair, that concludes my report.
Note: PRBP stands for post-retirement benefit plans. Excludes ACS International, Ltd., Hampden Data Services, Ltd., ACS Petroleum Research Fund and the Member Insurance Program.

6. 2019 Program Funding Reauthorization Request
ACS Festival Series
2019 Proposed Budget - $219,000
2020 Forecast Budget - $220,000
2021 Forecast Budget - $222,000
Note: Amounts represent net expenses before indirect assessments. 6

7. Report from the Society Committee on Budget and Finance
American Chemical Society
Report from the Society Committee on Budget and Finance
August 22, 2018
Boston, Massachusetts
Good afternoon. Thank you for making time on your busy agenda for this brief report from the Society Committee on Budget & Finance.
(CLICK)