1. Presenter: David M. Morris, C.P.A. Class A (nonalcoholic) Trustee General Service Board Treasurer AROUND THE PICNIC TABLE Finance

2. COMMUNICATING TO THE FELLOWSHIP ABOUT FINANCE  Spiritual value of contributing  Services provided to the Fellowship  Publishing  Grapevine and need for subscriptions growth  La Viña  Transfer from Reserve Fund to Pension Plan Liability Fund  Humanize Reserve Fund ownership  Not $15.3 m: $236.52 per group, $11.01 per member 1

3. GENERAL SERVICE BOARD FINANCIAL SUMMARY OF OPERATIONS 12-31-13 G.S.O. GENERAL FUND THE A.A.W.S. PUBLISHING THE A.A. GRAPEVINELA VIÑA 2013 COMBINED ACTUAL 2012 ACTUAL REVENUE Net Sales$12,604,719$3,019,339$127,270$15,751,328$15,536,458 Contributions6,906,371 6,557,608 Interest11439010,50011,00415,266 TOTAL REVENUE6,906,48512,605,1093,029,839127,27022,668,70322,109,332 EXPENSES Printing2,962,241402,18333,5443,397,9683,401,992 Royalties27,840 27,161 Shipping & Warehouse1,505,296623,64030,1922,159,1282,215,000 Program Expenses5,751,3873,200,8221,097,907206,07810,256,1949,796,825 Supporting Services3,756,1952,276,259590,9046,623,3586,374,725 TOTAL EXPENSES9,507,5829,972,4582,714,634269,81422,464,48821,815,703 NET INCOME (LOSS) OPERATIONS(2,601,097)2,632,651315,205(142,544)204,215293,629 RESERVE FUND Reserve Fund Balance at December 31 available to cover operating expenses Operating Expenses 15,301,653 16,879,552 15,353,752 16,228,337 Number of months Operating Expenses-approximate10.911.4 *Excludes non-operating Funds: Reserve, Capital Projects, Pension, Post-Retirement Medical Benefits 2

4. GENERAL SERVICE BOARD FINANCIAL SUMMARY OF OPERATIONS 12-31-13 G.S.O. GENERAL FUND THE A.A.W.S. PUBLISHING THE A.A. GRAPEVINELA VIÑA 2013 COMBINED ACTUAL 2013 BUDGET REVENUE Net Sales$12,604,719$3,019,339$127,270$15,751,328$15,562,535 Contributions6,906,371 6,697,000 Interest11439010,50011,00417,050 TOTAL REVENUE6,906,48512,605,1093,029,839127,27022,668,70322,276,585 EXPENSES Printing2,962,241402,18333,5443,397,9683,534,902 Royalties27,840 28,000 Shipping & Warehouse1,505,296623,64030,1922,159,1282,332,221 Program Expenses5,751,3873,200,8221,097,907206,07810,256,19410,737,010 Supporting Services3,756,1952,276,259590,9046,623,3586,370,792 TOTAL EXPENSES9,507,5829,972,4582,714,634269,81422,464,48823,002,925 NET INCOME (LOSS) OPERATIONS(2,601,097)2,632,651315,205(142,544)204,215(726,340) RESERVE FUND Reserve Fund Balance at December 31 available to cover operating expenses Operating Expenses 15,301,653 16,879,552 15,301,653 17,107,927 Number of months Operating Expenses-approximate10.910.8 *Excludes non-operating Funds: Reserve, Capital Projects, Pension, Post-Retirement Medical Benefits 3

5. GRATITUDE 4

6. 2012-2013 CONTRIBUTIONS SUMMARY 20122013 Group Contributions $5,451,874$5,718,306 Specials ¹582,011629,542 Individuals 384,055398,880 Foreign, WSM etc. 67,40373,800 Memorials 51,41863,178 Special Meetings ²16,57112,815 Other 4,2769,850 Totals6,557,6086,906,371 ¹Special contribution is one that comes from any number of A.A. entities that is not an A.A. Group, for example, a Conference, a Committee, an Area, a District, an Intergroup, etc. ²A Special Meeting is a meeting that does not want to be a group but does want to contribute to the General Service Board. 5

7. CONTRIBUTION HISTORY: 1983—2013 6

8. PERCENTAGE OF GROUPS CONTRIBUTING 2003—2013 7

9. THROUGH OUR OWN CONTRIBUTIONS 8

10. A DOLLAR IS NOT WHAT IT USED TO BE 19452014 9

11. INFLATION CALCULATOR $1.00 in 1945 had the buying power of $13.00 in 2014 $.08 in2014 had the buying power of $ 1.00 in1945 Source: U.S. Department of Labor 10

12. Publishing Services on Behalf of the G.S.B. GSO’s TWO BASIC FUNCTIONS 11 Group Records

13. 2011ACTUAL2012ACTUAL2013 ACTUAL ACTUAL Group Services $2,146,558$2,317,118$2,454,030 Public Information 293,208292,437278,984 Cooperation Professional Community 318,488339,318333,085 Treatment Facilities 135,781141,388129,222 Corrections 235,089257,061301,537 Overseas Services (including Literature Assistance) 500,345440,172479,074 General Service Conference 881,318774,900906,376 Regional Forums 382,742465,902459,213 Archives 521,716573,894651,169 Trustee/Director Activities 337,441412,391401,422 World Service Meeting 0212,5020 Supporting Services 2,994,4533,027,0483,113,470 Total 8,747,1399,254,1319,507,582 Increase over prior year % increase over prior 105,027 1.22% 506,992 5.80% 253,451 2.74% GENERAL SERVICE OFFICE FUNCTIONAL EXPENSES-DIRECT COSTS 12

14. SELECTED G.S.O. SERVICE EXPENSES — DIRECT COSTS 2013 P.I.CPCCorrectionsInternational Conference Regional Forums ArchivesTreatment 13

15. 2011Actual2012Actual2013Actual Group Services $3,263,908$3,437,762$3,648,966 Public Information 445,832435,022414,829 Cooperation with the Professional Community 484,271504,762495,274 Treatment Facilities 206,459210,326192,144 Corrections 357,460382,397448,363 Loners and Overseas Services 760,790654,789712,348 General Service Conference 1,340,0711,152,7231,347,715 Regional Forums 581,972693,064682,816 Archives 793,285853,710968,241 Trustees/Director Activities 513,089613,463596,886 WSM 316,113 Supporting Services—Allocated out Total 8,747,1399,254,1319,507,582 GROUP SERVICE ACTIVITIES—FULLY ABSORBED 14

16. 201120122013 Group Service Staff Assignment Activities $664,853$653,493$715,044 Box 459 303,879290,727301,164 A.A. Directories 100,26257,49713,426 Records & Files Depts. 853,912887,286970,040 Contributions, Processing, Verification and Documentation 940,651957,8311,065819 French Services 36,45239,29829,605 Spanish Services 23,70127,77633,582 Special Needs 170,443231,760166,402 Nominating 169,755292,095353,885 Total 3,263,9083,437,7633,648,966 GROUP SERVICE ACTIVITIES — FULLY ALLOCATED 15

17. 2011Actual2012Actual2013Actual Cost of Service per member per year $6.32$6.66$6.84 Cost of Service per group per year 137.01143.67146.96 Number of members reported 1,384,6991,388,7271,389,602 Number of groups reported 63,84564,41464,694 Percentage of groups contributing 42.4% 42.5% Contributions per member per year 4.524.724.97 Contributions per group per year 96.95101.80106.75 Cost of services NOT covered through Contributions that must be made up by using literature profits - per member per year 1.801.941.87 MEMBER SERVICES & STATISTICS 16

18. PERCENTAGE OF SERVICES SUPPORTED BY CONTRIBUTIONS 17

19. Publishing Services on Behalf of the G.S.B. GSO’s TWO BASIC FUNCTIONS 18 Group Records

20. 2013ACTUAL2012ACTUAL INCREASE(DECREASE) Gross Sales $12,841,973$12,620,075$221,898 Less Discounts allowed 237,254255,317(18,063) Interest earned 390392(2) Net Sales – Literature (including interest earned) 12,605,10912,365,150239,959 Cost of Literature sold 2,990,0812,973,22716,854 Direct Shipping and Warehousing 1,505,2961,513,60783,111 Gross Profit 8,109,7327,878,316231,416 Gross Profit Percentage 64.3%63.7% Program Expenses 3,200,8222,914,348286,474 Supporting Expenses 2,276,2592,115,073161,186 Total Expenses 5,477,0815,029,421447,660 Excess of Revenue Over Expenses 2,632,6512,848,895(216,244) A.A.W.S. PUBLISHING STATEMENT OF ACTIVITY 19

21. 2013ACTUAL2013BUDGET INCREASE (DECREASE) Gross Sales$12,841,973$12,800,000$41,973 Less Discounts allowed 237,254260,000(22,746) Interest earned 390400(10) Net Sales – Literature (including interest earned) 12,605,10912,540,40064,709 Cost of Literature sold2,990,0813,128,000(137,919) Direct Shipping and Warehousing1,505,2961,629,200(123,904) Gross Profit8,109,7327,783,200326,532 Gross Profit Percentage64.3%62.1% Program Expenses3,200,8223,122,43378,389 Supporting Expenses2,276,2592,266,08910,170 Total Expenses 5,477,0815,388,52288,559 Excess of Revenue Over Expenses2,632,6512,394,678237,973 A.A.W.S. PUBLISHING STATEMENT OF ACTIVITY 20

22. A.A.W.S. LITERATURE TITLES 2013 Units 2013 $ 2012 Units 2012 $ A.A. Big Books*972,9036,067,659947,7405,942,145 12 Steps & 12 Traditions371,4892,269,993366,6432,252,871 Daily Reflections152,0731,119,946148,0721,105,015 Living Sober140,047 524,876127,918 483,090 All others152,9152,859,499153,0292,836,954 Total**1,789,42712,841,9731,743,40212,620,075 7217 * English –USA/Canada only - 72 translations and 17 translations pending. 93 ** A.A.W.S. has published literature in 93 languages. 21

23. BIG BOOK UNIT SALES: 1992—2013 22

24. SELF-SUPPORT OF THE WORLD SERVICES OF ALCOHOLICS ANONYMOUS The A.A. spiritual principle of self-support enables us to pursue our primary purpose of carrying the message to the still-suffering alcoholic with a shared sense of responsibility for our lifesaving work and without interference or financial dependence on outsiders. From our Fellowship's earliest days, the expenses of the General Service Office, and the world services provided by it, have exceeded the amount derived from contributions of A.A. groups and members. As a result, providing these needed services has necessarily been supported in part by income from the sale of A.A. literature. It is the policy of the General Service Board that income from literature sales should only be in amounts required to allow continued provision of vitally needed services and maintenance of a Reserve Fund. We hope that the day will come when A.A. groups and members, through their contributions, will be able to fund fully the services provided by the General Service Office. If that is achieved, revenues from literature sales will only be needed in amounts necessary to cover the actual costs associated with literature production and to maintain a Reserve Fund. Approved by the General Service Board February 3, 2014 23

25. 2013ACTUAL2014BUDGET INCREASE (DECREASE) Gross Sales $12,841,973$15,300,000$2,458,027 Less Discounts allowed 237,254594,000356,746 Interest earned 390 0 Net Sales – Literature (including interest earned) 12,605,10914,706,3902,101,281 Cost of Literature sold 2,990,0813,542,370552,289 Direct Shipping and Warehousing 1,505,2961,940,070434,774 Gross Profit 8,109,7329,223,9501,114,218 Gross Profit Percentage 64.3%62.8% Program Expenses 3,200,8223,446,156245,334 Supporting Expenses 2,276,2592,375,91599,656 Total Expenses 5,477,0815,822,071344,990 Excess of Revenue Over Expenses 2,632,6513,401,879769,228 A.A.W.S. PUBLISHING STATEMENT OF ACTIVITY 24

26. 25

27. A.A. GRAPEVINE – STATEMENTS OF ACTIVITIES AVERAGE CIRCULATION77,12683,263(6,137) Online5,1755,535(360) 2013 ACTUAL 2012 ACTUAL INCREASE (DECREASE) Magazine Income $2,242,363$2,342,910($100,547) Direct Costs: Magazine 764,674817,663(52,989) Gross Profit on Magazine 1,477,6891,525,247(47,558) Other Publishing Income 776,976705,31071,666 Costs of Goods and Delivery 261,149281,642(20,493) Gross Profit on Other Publishing Items 515,827423,66892,159 Total Gross Profit 1,993,5161,948,91544,601 COSTS AND EXPENSES Editorial Costs 633,798605,08928,709 Circulation and Business 904,466905,135(669) General and Administrative 150,547196,488(45,941) Total Costs and Expenses 1,688,8111,706,712(17,901) Interest Income 10,50014,800(4,300) Excess of Revenue over Expenses 315,205257,00358,202 26

28. A.A. GRAPEVINE — STATEMENTS OF ACTIVITIES AVERAGE CIRCULATION77,12678,760(1,634) Online5,1754,653522 2013 ACTUAL 2013 BUDGET INCREASE (DECREASE) Magazine Income $2,242,363$2,200,256$42,107 Direct Costs: Magazine 764,674815,296(50,622) Gross Profit on Magazine 1,477,6891,384,96092,729 Other Publishing Income 776,976704,32072,656 Costs of Goods and Delivery 261,149269,421(8,272) Gross Profit on Other Publishing Items 515,827434,89980,928 Total Gross Profit 1,993,5161,819,859173,657 COSTS AND EXPENSES Editorial Costs 633,798697,989(64,191) Circulation and Business 904,466918,757(14,291) General and Administrative 150,547207,459(56,912) Total Costs and Expenses 1,688,8111,824,205(135,394) Interest Income 10,50016,300(5,800) Excess of Revenue over Expenses 315,20511,954303,251 27

29. AA Grapevine Circulation: 1974-2013 28

30. GV OTHER PUBLISHING GROSS REVENUE Titles 2013 $2012 $2011 $ Language of The Heart $103,774$ 76,116$ 78,356 Emotional Sobriety - Vol. I & II 87,005 95,414 92,601 One on One 73,483 - - No Matter What 57,067 - - All others * 455,647 533,780 469,068 Total 776,976 705,310 640,025 *2013 and 2012 include $32,734 and $24,150 of sales of E-books, respectively. 29

31. A.A. GRAPEVINE — STATEMENTS OF ACTIVITIES AVERAGE CIRCULATION77,12673,401(3,725) Online5,1754,561(614) 2013 ACTUAL 2014 BUDGET INCREASE (DECREASE) Magazine Income $2,242,363$2,132,851$(109,512) Direct Costs: Magazine 764,674750,733(13,941) Gross Profit on Magazine 1,477,6891,382,118(95,571) Other Publishing Income 776,976787,55710,581 Costs of Goods and Delivery 261,149266,5565,407 Gross Profit on Other Publishing Items 515,827521,0015,174 Total Gross Profit 1,993,5161,903,119(90,397) COSTS AND EXPENSES Editorial Costs 633,798687,11753,319 Circulation and Business 904,466926,28021,814 General and Administrative 150,547207,29056,743 Total Costs and Expenses 1,688,8111,820,687131,876 Interest Income 10,50011,8001,300 Excess of Revenue over Expenses 315,20594,232(220,973) 30

32. LA VIÑA — STATEMENTS OF ACTIVITIES Average Circulation 8,9829,16010,145 2011 ACTUAL 2012 ACTUAL 2013 ACTUAL INCOME Subscription Income $98,135$96,892$106,960 Back Issues 8,42810,3789,590 Magazine Income 106,563107,270116,550 Income from Related Items 22,76116,21010,721 Total La Viña Income 129,324123,480127,271 Total Direct Costs 58,59658,01563,737 Gross Profit 70,72865,46563,534 COSTS AND EXPENSES Editorial Costs 84,507113,828130,546 Circulation and Business 54,79265,61073,022 General and Administrative 1,1521,8472,510 Total Costs and Expenses 140,451181,285206,078 Shortfall between Revenue and Expenses (69,723)(115,820)(142,544) Support from General Service Board General Fund Net 69,723 0 115,820 0 142,544 0 31

33. LA VIÑA SALES AND CIRCULATION 32

34. LA VIÑA — SHORTFALL BETWEEN REVENUE AND EXPENSES 33

35. ObligationsFundedUnfunded 12/31/201212/31/201312/31/201212/31/201312/31/201212/31/2013 Pension $29.9m$27.7m$19.5m$24.1m$10.4m$3.6m Medical 5.9m5.7m2.0m2.7m3.9m3.0m 35.8m33.4m21.5m26.8m14.3m6.6m A.A. PENSION AND POSTRETIREMENT MEDICAL Notes: 1.From 2012 to 2013 the combined Obligations decreased by $2.4m 2.From 2012 to 2013 the combined Funded Status increased by $5.3m 3.From 2012 to 2013 the combined Unfunded Status decreased by $7.7m 34

36. PENSION PLAN LIABILITY  Pension Protection Act (PPA)  Moving Ahead for Progress in the 21 St Century Act (MAP – 21)  Minimum Funding Requirements  Statement of Financial Accounting Standards No. 87 – Accounting for Post-Retirement Benefits, as amended 35

37. PENSION PLAN LIABILITY 2011 2012 2013 Actives 878482 Vested & Terminated 474543 Retirees & Beneficiaries 606870 Total 194197195 Average Payroll $67,300$70,200$70,700 Benefits Paid 985,2571,014,8381,086,724 Cash Pension Costs Charged to Operating Expenses 1,678,7501,812,2502,105,000 36 Estimated benefits over next 5 years: 2014 – 1,375,967 2015 – 1,501,149 2016 – 1,544,586 2017 – 1,564,095 2018 – 1,580,950

38. 20132012 Projected Benefit Obligation – 1/1 29,874,32027,189,259 Service & Interest Costs 1,925,108 1,985,114 Benefits Paid 1,086,724 1,014,838 Actuarial (Gains)/Losses (3,054,213) 1,714,785 Projected Benefit Obligation – 12/31 27,658,49129,874,320 Plan Assets – 1/1 19,505,59716,895,502 Return on Plan Assets 3,564,880 1,812,683 Employer Contributions 2,105,0001,812,250 Benefits Paid (1,086,724)(1,014,838) Plan Assets – 12/31 24,088,75319,505,597 Net – Unfunded Status (3,569,738)(10,368,723) 37 PROJECTED PENSION BENEFIT OBLIGATION

39. RESERVE FUND 38

40. Contributions Literature FELLOWSHIP GSBRESERVEFUND Cash Flow Excess Special Projects Budget Deficit GENERAL SERVICE OFFICE GENERAL SERVICE OFFICE 39 G.S.O

41. Subscriptions Other Publishing FELLOWSHIP GSBRESERVEFUND Cash Flow Excess Special Projects Budget Shortfall GRAPEVINE 40 G.V.

42. RESERVE FUND  Reserve Fund Balance December 31, 2012 - $15,353,752 – Annual earnings - $138,650 December 31, 2013 - $15,301,653 – Annual earnings - $ 94,824 INVESTMENT GUIDELINES “Minimum Requirement” To assure the liquidity, the Reserve Fund shall contain investment instruments having maturities of one year or less in an amount equal to the sum of (a) the unearned Grapevine subscription liability and (b) the operating cash requirements of the service entities. This amount will be reviewed annually by the trustees’ Finance and Budgetary Committee. “No More Than” The balance of the Reserve Fund shall be invested in instruments with maturities of between zero (0) and ten (10) years, provided that at no time shall more than 50% of the principal amount of such balance consist of investments having maturity dates of five or more years. 41

43. THE GENERAL SERVICE BOARDRESERVE FUND THE GENERAL SERVICE BOARD — RESERVE FUND 12-31-200912-31-201012-31-201112-31-201212-31-2013 Balance available to cover Operating Expenses $12,135,909*$14,368,427*$15,296,921$15,353,752$15,301,653 Operating Expenses 15,327,09215,271,82015,408,28416,228,33716,879,552 Number of months covered 9.511.311.911.410.9 Groups 61,58162,87363,84564,41464,694 Membership 1,358,8791,373,6811,384,6991,388,7271,389,602 Equivalent Balance per Group 197.07228.53239.59238.36236.52 Equivalent Balance per Member 8.9310.4611.0511.0611.01 By Conference action, the “Prudent Operating Reserve” was defined as an amount equal to the preceding year’s combined operating expenses of A.A. World Services, A.A. Grapevine and the General Fund of the General Service Board. Operating expenses include “office and operating expenses” and do not include the Cost of Products or Manufacturing cost. *Includes pending transfer 42

44. KEY ACTIONS TO MAINTAINING THE RESERVE FUND  Restored the price of the Big Book in July 2004 by raising the price by $1.  Announced increases in certain book prices and handling charges effective July 1, 2005.  Price increases July 2009 and October 2014 for long term fiscal health.  Transfer of funds in 2014 to partially fund Pensions Plan Liability and lower future operating costs. 43

45. TRUSTEES’ FINANCE REPORT  G.S.O. 2014 Balance Budget Place continuing emphasis on Self-Support by Fellowship Literature price increases (selected items) Printing of commemorative Edition (First printing of the Big Book)  G.S.O. 2015 2014 revenue increases should continue FOCUS : Self-Support as sustainable revenue for A.A.’s future  Appreciation for Fellowship’s responses to contributions and to our Birthday Plan. Grapevine assumptions : 1.2014 projections show positive (with 2015 turning negative) results assuming that current restrictions on engagement activities remain in place. 2.Print subscriptions are projected to continue to decline in the absence of recommended communications activities and organization—wide support. 3.Potential for digital subscription growth, including the possibility of the replacement of print subscription fall-off, is also affected by Assumptions 1 and 2. 44

46. A.A. INTERNATIONAL CONVENTIONS ATLANTA2015 SAN ANTONIO 2010 TORONTO 2005 MINNEAPOLIS 2000 ATTENDANCE50,000 EST52,38342,50047,500 PRICE/PERSON$100 - $110$95 - $110$85 - $95 REVENUES5,100,0005,212,6503,919,3324,108,388 EXPENSES5,020,0004,368,1053,958,3723,110,804 NET 80,000 844,545 (39,040) 997,584 45

47. GENERAL SERVICE BOARD FINANCIAL SUMMARY OF OPERATIONS 12-31-13 G.S.O. GENERAL FUND THE A.A.W.S. PUBLISHING THE A.A. GRAPEVINELA VIÑA 2013 COMBINED ACTUAL 2014 BUDGET REVENUE Net Sales$12,604,719$3,019,339$127,270$15,751,328$17,755,686 Contributions$6,906,3716,906,3717,000,000 Interest11439010,50011,00412,200 TOTAL REVENUE6,906,48512,605,1093,029,839127,27022,668,70324,767,886 EXPENSES Printing2,962,241402,18333,5443,397,9684,010,111 Royalties27,840 38,870 Shipping & Warehouse1,505,296623,64030,1922,159,1282,514,861 Program Expenses5,751,3873,200,8221,097,907206,07810,256,19410,859,707 Supporting Services3,756,1952,276,259590,9046,623,3587,096,236 TOTAL EXPENSES9,507,5829,972,4582,714,634269,81422,464,48824,519,785 NET INCOME (LOSS) OPERATIONS(2,601,097)2,632,651315,205(142,544)204,215248,101 RESERVE FUND Reserve Fund Balance at December 31 available to cover operating expenses Operating Expenses 15,301,653 16,879,552 14,061,653 17,993,843 Number of months Operating Expenses-approximate 10.99.4 *Excludes non-operating Funds: Reserve, Capital Projects, Pension, Post-Retirement Medical Benefits 46

48. 47 RECOVERY UNITY SERVICE