Treasurer s Report. The ABA s FY 2015 Finances Through August 31, American Bar Association Board of Governors Baltimore, MD November, 2015

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1 Treasurer s Report The ABA s FY Finances Through August 31, American Bar Association Board of Governors Baltimore, MD November, G. Nicholas Casey, Jr. Charleston, West Virginia gncasey@lgcr.com

2 For FY, the Association s last fiscal year ending August 31,, we now have preliminary preaudit results, which I will discuss in this report. The audit is in process and I will share the final audited results at our February meeting. The new year FY2016 is not far enough along to warrant significant discussion at this point but there are several noteworthy items. I will also discuss the Association s ongoing efforts as we focus on sustainability into the future. Preliminary Consolidated FY15 Results through August 31, We ended the FY with a consolidated $14.8 million deficit. This is actual compared to budget. This has little impact on the Association s cash position but demonstrates that on an annual basis we spend more than we bring in. This is not sustainable over the long run and is of concern. For FY15, the Association s revenue shortfall is the key factor contributing to the deficit. On a consolidated basis the ABA reports results in three segments: 1) General Operations; 2) Sections, Divisions and Forums; and 3) Gifts and Grants. Attached to this report is the Consolidated Summary of Operating Results for FY15 which provides additional detail. The preliminary consolidated results through August 31,, shown in the chart below, reflect operating revenue of $200.6 million, which was $9.5 million below budget. budget shortfalls were experienced in General Operations ($7.6 million) and Sections ($5.5 million), offset by a favorable Gifts and Grants variance ($3.7 million). As can be seen on the waterfall chart on the next page, the unfavorable revenue variance is mainly due to publications ($5.5 million), membership dues ($3.7 million) and meeting fees ($2.7 million). We have taken steps to address the two largest variances. We restructured our publications operations and, for FY16, budgeted dues revenue much more conservatively. For FY16, we budgeted dues revenue lower than we actually collected in FY15. We still have more work to do as we must address the Annual Meeting financial performance, grow non-dues revenue and maintain and enhance dues revenue. General Operations Consolidated By Segment (US $000s) August 31, August 31, 2014 Variance Variance Variance Variance Actual Budget Actual $ % $ % 107, ,597 (7,658) -6.6% 116,176 (8,237) -7.1% Sections 51,978 57,440 (5,462) -9.5% 50,199 1, % Gifts and Grants 40,721 37,064 3, % 38,101 2, % Eliminations & Other % 60 (60) % Total 200, ,101 (9,463) -4.5% 204,536 (3,898) -1.9%

3 Consolidated by Reporting Line FY Budget to FY Preliminary Actual (Red/Unfavorable; Green/Favorable) Actual $200.6M Budget $210.1M vs. Budget (Unfav $9.5M) ($ in millions) $210.1 ($5.5) ($3.7) ($2.7) ($1.5) $1.5 $1.4 $0.9 $0.6 ($0.6) $200.6 FY Budget Publications $8.5M Membership Dues $74.1M Meeting Fees $27.9M Misc. Other $1.7M Net Assets Released from Restrictions $1.6M Royalties $9.1M Gifts, Grants, Contr., and Spons. $59.9M Accred. Fees $4.5M All Other $13.5M FY Actual Operating expenses were under budget and partially offset the revenue shortfall. We anticipated a larger offset but unanticipated additional year end expenses reduced the offset. Through the same period, consolidated operating expenses of $215.4 million were $0.8 million favorable (under). Notable unanticipated items contributing to the unfavorable General Operations expenses are unanticipated legal expenses ($0.8 million), publishing reorganization severance costs ($0.8 million), and higher than budgeted pension expense ($0.9 million) from a decline in overall interest rates last year. Sections were favorable to budget by $3.2 million, offset by unfavorable budget variances in Gifts and Grants ($1.7 million) and General Operations ($0.7 million). The unfavorability in Grants expenses ($1.3 million) is not a concern because Grants received $1.6 million more revenue than budgeted and we are typically able to bill grantors for incurred grant expenses. General Operations Consolidated Operating Expenses By Segment (US $000s) August 31, August 31, 2014 Variance Variance Variance Variance Actual Budget Actual $ % $ % 116, ,594 (650) -0.6% 111,635 (4,609) -4.1% Sections 60,055 63,280 3, % 52,398 (7,657) % Gifts and Grants 39,118 37,385 (1,733) -4.6% 40,262 1, % Eliminations & Other % % Total 215, , % 204,355 (11,062) -5.4%

4 Consolidated Expenses by Reporting Line FY Budget to FY Preliminary Actual (Red/Unfavorable; Green/Favorable) Actual Expense $215.4M Budget Expense $216.3M vs. Budget (Fav $0.8M) ($ in millions) $216.3 $3.1 $1.8 $1.0 $0.8 ($4.9) ($0.7) ($0.5) $0.2 $215.4 FY Budget Publishing $12.0M Compensation $73.2M Transfers $0.0M Advertising and Marketing $3.3M Professional Services $30.5M Other $6.7M Fringe Benefits and Payroll Taxes $24.8M All Other $64.9M FY Actual The net consolidated unaudited results for FY15 produced the operating loss (or revenues under operating expenses) of $14.8 million. General Operations Consolidated s over / (under) Expenses By Segment (US $000s) August 31, August 31, 2014 Variance Variance Variance Variance Actual Budget Actual $ % $ % (8,305) 3 (8,308) 0.0% 4,541 (12,846) % Sections (8,077) (5,840) (2,237) 38.3% (2,199) (5,878) 267.3% Gifts and Grants 1,603 (321) 1, % (2,161) 3, % Eliminations & Other % Total (14,779) (6,158) (8,621) 140.0% 181 (14,961) % Through August 31, on a consolidated basis Net Operating over/under Expenses resulted in a $14.8 million deficit. This consists of a $8.3 million deficit in General Operations, a $8.1 million deficit in Sections, and a $1.6 million surplus in Gifts and Grants. We also had a non-operating investment loss of $17.0 million and a net change in pension liability of $15.4 million. Financial markets have since rebounded and the non-operating investment loss is not of great concern. Including the above items in preliminary non-operating consolidated results, the ABA s unrestricted deficit for the fiscal year is $48.1 million. This deficit, along with the change in restricted net assets, results in a total reduction in net assets of $47.9 million.

5 Statement of Financial Position (Balance Sheet) Even with the non-operating deficit, the ABA continues to maintain a strong balance sheet. Total assets are $347.8 million and net assets are $172.9 million. August 31, Total Assets: $347.8 million US $ millions $20.7 $15.5 August 31, 2014 Total Assets: $381.0 million US $ millions $18.9 $17.9 $311.6 Cash, Cash Equivalents, and Investments Receivables and Other Current Assets Property and Equipment, Net $344.2 Cash, Cash Equivalents, and Investments Receivables and Other Current Assets Property and Equipment, Net Excluding $0.4 million cash held in the Russell investment accounts, the Association s investment balance as of August 31, is $304.5 million down $22.0 million since August 31, As shown in the chart below, about two-thirds of the investment balance decrease is due to the net sale of investments to fund operations, in accordance to the reserve policy and for cash management needs. Additionally, about onethird of the $22.0 million decrease is a result of investment performance and fees. Two-thirds of reduction in investment balance from Sales One-third of reduction in investment balance from investment performance Note Beginning Balance 9/1/14 $ Includes $0.4m cash in Russell investment accounts Net investment fund withdrawals and additions (14.4) $9.7m General Operations, $4.7m Sections Invesment (7.2) Includes NJC gains/losses, net of fees Ending Balance 8/31/15 $ Includes $0.4m cash in Russell investment accounts The largest liability on our preliminary Statement of Financial Position is our gross pension obligation liability of $79.0 million as of August 31, per AON, our actuaries, which is up from $63.8 million as of August 31, As reported in past reports, the pension obligation is not currently due. It is determined based on our future pension obligations to pension plan participants offset by plan investments. Interest rates, which remain historically low, significantly impact the calculation of the pension obligation. If rates rise, the obligation declines. As you are aware, there was a Board decision to borrow $40 million and pay the proceeds to the pension fund. This transaction, which closed on October 14,, accelerates required future funding payments, stabilizes the annual funding requirement for the next 5 years and lowers the overall amount the ABA is projected to pay into the pension. The $40 million loan does not increase the ABA s liabilities as the pension liability will be reduced by the loan amount.

6 Total Pension Obligation (US $ in Millions) % % % 8/31/2014 8/31/ Accrued Pension LiMbiliPy FMir VMlue of InvesPmenPs We are fortunate to have a substantial asset base but total ABA assets declined $33.2 million in FY15 due to both poor operating performance, investment performance and the experience loss on the pension. FY16 Budget Process The Board of Governors approved the final FY16 consolidated budget at the August Annual Meeting. FY2016 Final Budget Expense General Operations $ $ Sections Grants Gifts Total $ $ General Operations and Grants budgets are balanced. Sections and Gifts are not. The Board of Governors approves Section deficit budgets if the Section has financial reserves to cover the deficit. The Gifts budget typically shows a deficit for both budget and actual arising from how certain support funding for Gifts is budgeted. Grants have been broken out separately in the FY16 budgeted presentation to better follow efforts to address this reporting issue for Gifts.

7 Sustainability The Sustainability Task Force appointed by our President is investigating and meeting on various cost saving measures. The Sustainability Task Force will make recommendations to the Board of Governors at the February Mid-Year Meeting that address protecting the mission of the ABA while improving efficiencies and reducing costs. The other important aspect of sustainability is revenue. Ongoing efforts to stabilize and increase dues revenue and substantially increase non dues revenue are being worked on by senior staff on a daily basis. Our Association with its strong financial position remains vibrant but we must continue to work to maintain that financial strength. Transparency and Clarity Financial Services led by Bill Phelan as CFO and Jerry Kiska as Deputy CFO are here to serve you. Feel free to reach out to all of us for information or assistance. Thank you for the privilege of serving as your Treasurer. Nick Casey.

8 Consolidated Summary FY - Preliminary August FYTD $ in millions Actual vs. Budget Actual FY Budget FY vs. Budget Fav/(Unfav) General Operations $ $ $ (7.7) Section (5.5) Gifts and Grants Elim. & Other 0.0 (0.0) 0.0 Total (9.5) Expense General Operations (0.6) Section Gifts and Grants (1.7) Elim. & Other 0.0 (0.0) (0.0) Total Expense s over / (under) Expenses General Operations (8.3) 0.0 (8.3) Section (8.1) (5.8) (2.2) Gifts and Grants 1.6 (0.3) 1.9 Elim. & Other (0.0) (0.0) (0.0) Total s over / (under) Expenses $ (14.8) $ (6.2) $ (8.6) Actual vs. Prior Year Actual FY Actual FY 2014 vs. Prior Fav/(Unfav) General Operations $ $ $ (8.2) Section Gifts and Grants Elim. & Other (0.1) Total (3.9) Expense General Operations (4.6) Section (7.7) Gifts and Grants Elim. & Other Total Expense (11.1) s over / (under) Expenses General Operations (8.3) 4.5 (12.8) Section (8.1) (2.2) (5.9) Gifts and Grants 1.6 (2.2) 3.8 Elim. & Other (0.0) 0.0 (0.0) Total s over / (under) Expenses $ (14.8) $ 0.2 $ (15.0)

9 Consolidated Statements of Financial Position $ in millions Preliminary August 31 % to Total August Prior Year Variance Assets Cash and Cash Equivalents $ 7.1 5% $ 18.1 $ (11.1) Accounts Receivable % Inventory, Prepaid & Other 6.3 2% 7.0 (0.8) Investments: ABA Operating Funds % (14.1) ABA Section Funds % (8.7) ABA Fund for FJE % ABA Funds Held for Related Parties 0.3 0% Investments Total % (21.6) Property and Equipment, Net % 17.9 (2.4) Total Assets $ % $ $ (33.2) Liabilities Payables and Other Debt $ % $ 17.2 $ 3.4 Deferred and Deferred Rent Abatement % 79.3 (3.9) Pension Liability % Total Liabilities $ % $ $ 14.7 Net Assets Unrestricted $ % $ $ (48.0) Temporarily Restricted 4.3 1% 4.3 (0.0) Permanently Restricted 7.1 2% Total Net Assets $ % $ $ (47.9) Total Liabilities and Net Assets $ % $ $ (33.2) My report summarizes our results and for more detailed information I refer you to the attached Financial Statements as of August 31, beginning on the next page.

10 STATEMENT OF ACTIVITIES HIGHLIGHTS By Segment (US $000's) Preliminary August 31, - FY (US $000's) Operating Expenses s over / (under) Expenses FYTD FYTD FYTD FYTD FYTD FYTD Actual Budget Actual to Actual to Actual Actual Var. Actual Var. Actual Budget Actual to Actual to Actual Actual Var. Actual Var. Actual Budget Actual to Actual to Actual Actual Var. Actual Var. Aug Aug Budget Var. Budget Var. Aug Aug to Aug to Aug Aug Budget Var. Budget Var. Aug Aug to Aug to Aug Aug Budget Var. Budget Var. Aug Aug to Aug to Aug Aug 2014 Aug 2014 Aug 2014 Aug Aug 2014 Aug 2014 Aug 2014 Aug Aug 2014 Aug 2014 Aug 2014 $ % $ % $ % $ % $ % $ % General Ops 107, ,597 (7,658) -6.6% 116,176 (8,237) -7.1% 116, ,594 (650) -0.6% 111,635 (4,608) -4.1% (8,304) 3 (8,307) 0.0% 4,540 (12,845) % Sections 51,978 57,440 (5,461) -9.5% 50,199 1, % 60,055 63,280 3, % 52,398 (7,658) -14.6% (8,077) (5,840) (2,237) -38.3% (2,199) (5,879) % Gifts and Grants 40,721 37,064 3, % 38,101 2, % 39,118 37,385 (1,733) -4.6% 40,262 1, % 1,603 (321) 1, % (2,161) 3, % Elim. & Other 0 (0) 0 0.0% 60 (60) % 0 (0) (0) 0.0% % (0) (0) (0) 0.0% 0 (0) 0% Total 200, ,101 (9,462) -4.5% 204,536 (3,897) -1.9% 215, , % 204,355 (11,062) -5.4% (14,778) (6,158) (8,620) % 181 (14,959) %

11 RABA American Bar Association Consolidated Statements of Activities and Changes in Net Assets - Comparison to Budget and Prior Year Period Ending Preliminary August 31, (US $000's) Year-to-Date Full Year Description Actual FY vs. Budget Fav/(Unfav) Budget Actual FY 2014 Fav/(Unfav) Prior 2014 Full Year Fav/(Unfav) s Membership Dues $ 74, % $ 77, % $ (3,720) -4.8% $ 71, % $ 2, % $ 77,782 $ 71,913 $ 5,869 Meeting Fees 27, % 30, % (2,664) -8.7% 26, % 1, % 30,607 26,820 3,788 Advertising 3, % 3, % (285) -7.7% 3, % 5 0.1% 3,699 3, Gifts, Grants, Contributions, and Sponsorships 59, % 58, % % 58, % 1, % 58,963 58, Publications 8, % 13, % (5,495) -39.4% 11, % (2,711) -24.3% 13,959 11,176 2,783 Royalties 9, % 7, % 1, % 8, % % 7,675 8,774 (1,099) Accreditation Fees 4, % 3, % % 4, % % 3,902 4,018 (116) Miscellaneous Other 1, % 3, % (1,474) -46.9% 2, % (978) -37.0% 3,141 2, Investment income from Operations 10, % 10, % (293) -2.8% 7, % 2, % 10,330 7,293 3,037 Designated Reserve for Operations - 0.0% - 0.0% - 0.0% 8, % (8,810) % - 8,810 (8,810) Net Assets Released from Restrictions 1, % % 1, % 1, % % 42 1,331 (1,289) Total s $ 200, % $ 210, % $ (9,462) -4.5% $ 204, % $ (3,897) -1.9% $ 210,101 $ 204,536 $ 5,565 Expenses Compensation $ 73, % $ 75, % $ 1, % $ 72, % $ (1,177) -1.6% $ 75,030 $ 72,050 $ (2,980) Fringe Benefits and Payroll Taxes 24, % 24, % (507) -2.1% 23, % (1,268) -5.4% 24,302 23,541 (761) Professional Services 30, % 25, % (4,879) -19.1% 25, % (4,583) -17.7% 25,596 25, Meetings and Travel 42, % 42, % (145) -0.3% 39, % (3,713) -9.5% 42,764 39,196 (3,568) Advertising and Marketing 3, % 4, % % 3, % % 4,111 3,797 (314) Publishing 12, % 15, % 3, % 12, % % 15,115 12,710 (2,405) Facilities 22, % 22, % % 21, % (852) -4.0% 22,320 21,168 (1,152) Transfers - 0.0% 1, % 1, % (0) 0.0% (0) 0.0% 1,039 (0) (1,039) Other Expenses 6, % 5, % (678) -11.3% 6, % (659) -11.0% 5,982 6, Total Expenses $ 215, % $ 216, % $ % $ 204, % $ (11,062) -5.4% $ 216,259 $ 204,355 $ (11,904) Net s over/(under) Expenses $ (14,778) -7.4% $ (6,158) -2.9% $ (8,620) % $ % $ (14,959) 0.0% $ (6,158) $ 181 $ (6,339) Net Change in Pension Liability other than Periodic Cost $ (15,441) -7.7% $ - 0.0% $ (15,441) 0.0% $ (2,914) -1.4% $ (12,527) 429.9% $ - $ (2,914) $ 2,914 Investment Income (16,976) -8.5% % (17,277) 0.0% 34, % (51,675) % ,699 (34,397) Reserve Transfers - 0.0% - 0.0% - 0.0% (8,810) -4.3% 8, % - (8,810) 8,810 Other Non-operating (864) -0.4% (17) 0.0% (847) 0.0% (191) -0.1% (674) 353.3% (17) (191) 173 Net change in Unrestricted Net Assets $ (48,060) -24.0% $ (5,874) -2.8% $ (42,186) % $ 22, % $ (71,025) % $ (5,874) $ 22,965 $ (28,839) Net Change in Temporarily Restricted Net Assets $ (4) 0.0% $ - 0.0% $ (4) 0.0% $ % $ (990) % $ - $ 986 $ (986) Net Change in Permanently Restricted Net Assets $ % $ - 0.0% $ % $ 9 0.0% $ % $ - $ 9 $ (9) Net Change in Total Net Assets $ (47,896) -23.9% $ (5,874) -2.8% $ (42,022) % $ 23, % $ (71,856) % $ (5,874) $ 23,960 $ (29,834) Non-Operating Operating

12 RABA O American Bar Association General Operations Statements of Activities and Changes in Net Assets - Comparison to Budget and Prior Year Period Ending Preliminary August 31, (US $000's) Year-to-Date Full Year Description Actual FY vs. Budget Fav/(Unfav) Budget Actual FY 2014 Fav/(Unfav) Prior 2014 Full Year Fav/(Unfav) s Membership Dues $ 61, % $ 63, % $ (2,737) -4.3% $ 58, % $ 2, % $ 63,843 $ 58,124 $ 5,718 Meeting Fees 7, % 8, % (1,653) -18.4% 6, % % 8,990 6,493 2,497 Advertising 2, % 3, % (272) -8.7% 2, % (125) -4.2% 3,121 2, Gifts, Grants, Contributions, and Sponsorships 15, % 15, % (389) -2.5% 16, % (1,364) -8.2% 15,606 16,581 (975) Publications 2, % 5, % (2,248) -43.0% 3, % (720) -19.5% 5,226 3,698 1,528 Royalties 7, % 6, % % 7, % % 6,777 7,128 (351) Accreditation Fees % - 0.0% % 3, % (3,420) -87.9% - 3,889 (3,889) Miscellaneous Other 1, % 3, % (1,462) -44.6% 2, % (777) -30.0% 3,275 2, Investment income from Operations 8, % 8, % (10) -0.1% 5, % 2, % 8,760 5,839 2,921 Designated Reserve for Operations - 0.0% - 0.0% - 0.0% 8, % (8,810) % - 8,810 (8,810) Net Assets Released from Restrictions % - 0.0% % % (16) -34.3% - 48 (48) Total s $ 107, % $ 115, % $ (7,658) -6.6% $ 116, % $ (8,237) -7.1% $ 115,597 $ 116,176 $ (579) Expenses Compensation $ 56, % $ 56, % $ % $ 54, % $ (1,164) -2.1% $ 56,416 $ 54,856 $ (1,561) Fringe Benefits and Payroll Taxes 19, % 18, % (783) -4.3% 18, % (1,002) -5.5% 18,414 18,194 (220) Professional Services 10, % 8, % (1,561) -18.1% 8, % (1,339) -15.2% 8,615 8, Meetings and Travel 9, % 10, % % 8, % (1,179) -13.4% 10,126 8,778 (1,348) Advertising and Marketing 2, % 3, % % 3, % % 3,325 3,192 (133) Publishing 5, % 6, % % 5, % % 6,178 5,383 (795) Facilities 15, % 15, % % 15, % (98) -0.7% 15,239 15,030 (209) Transfers 1, % 2, % % % (1,100) % 2, (1,337) Other Expenses (4,360) -4.0% (4,937) -4.3% (576) -11.7% (3,515) -3.0% % (4,937) (3,515) 1,422 Total Expenses $ 116, % $ 115, % $ (650) -0.6% $ 111, % $ (4,608) -4.1% $ 115,594 $ 111,635 $ (3,958) Net s over/(under) Expenses $ (8,304) -7.7% $ 3 0.0% $ (8,307) 0.0% $ 4, % $ (12,845) % $ 3 $ 4,540 $ (4,537) Net Change in Pension Liability other than Periodic Cost $ (15,441) -14.3% $ - 0.0% $ (15,441) 0.0% $ (2,914) -2.5% $ (12,527) 429.9% $ - $ (2,914) $ 2,914 Investment Income (14,139) -13.1% - 0.0% (14,139) 0.0% 20, % (34,989) % - 20,850 (20,850) Reserve Transfers - 0.0% - 0.0% - 0.0% (8,810) -7.6% 8, % - (8,810) 8,810 Other Non-operating % - 0.0% % (172) -0.1% % - (172) 172 Net change in Unrestricted Net Assets $ (37,861) -35.1% $ 3 0.0% $ (37,864) 0.0% $ 13, % $ (51,356) % $ 3 $ 13,495 $ (13,492) Net Change in Temporarily Restricted Net Assets $ (41) 0.0% $ - 0.0% $ (41) 0.0% $ % $ (54) % $ - $ 13 $ (13) Net Change in Permanently Restricted Net Assets $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - $ - $ - Net Change in Total Net Assets $ (37,902) -35.1% $ 3 0.0% $ (37,905) 0.0% $ 13, % $ (51,410) % $ 3 $ 13,508 $ (13,505) Non-Operating Operating

13 S RABA American Bar Association Section Statements of Activities and Changes in Net Assets - Comparison to Budget and Prior Year Period Ending Preliminary August 31, (US $000's) Year-to-Date Full Year Description Actual FY vs. Budget Fav/(Unfav) Budget Actual FY 2014 Fav/(Unfav) Prior 2014 Full Year Fav/(Unfav) s Membership Dues $ 12, % $ 13, % $ (982) -7.0% $ 13, % $ (832) -6.0% $ 13,939 $ 13,788 $ 151 Meeting Fees 19, % 21, % (1,779) -8.2% 19, % % 21,603 19,533 2,070 Advertising % % (14) -2.4% % % Gifts, Grants, Contributions, and Sponsorships 6, % 6, % % 6, % % 6,518 6, Publications 5, % 8, % (3,238) -37.5% 7, % (1,949) -26.5% 8,632 7,343 1,289 Royalties 1, % % % 1, % (82) -5.2% 899 1,555 (657) Accreditation Fees 4, % 3, % % % 3, % 3, ,848 Miscellaneous Other (240) -0.5% (201) -0.4% (39) 19.6% (51) -0.1% (189) 368.3% (201) (51) (150) Investment income from Operations 1, % 1, % (285) -18.2% 1, % (169) -11.6% 1,570 1, Designated Reserve for Operations - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% Net Assets Released from Restrictions - 0.0% - 0.0% - 0.0% 0 0.0% (0) % - 0 (0) Total s $ 51, % $ 57, % $ (5,461) -9.5% $ 50, % $ 1, % $ 57,440 $ 50,199 $ 7,241 Expenses Compensation $ 8, % $ 9, % $ 1, % $ 7, % $ (828) -11.2% $ 9,768 $ 7,368 $ (2,399) Fringe Benefits and Payroll Taxes 2, % 3, % % 2, % (497) -21.1% 3,175 2,355 (820) Professional Services 3, % 3, % % 2, % (401) -14.6% 3,262 2,756 (506) Meetings and Travel 25, % 25, % % 22, % (2,146) -9.4% 25,707 22,945 (2,762) Advertising and Marketing % % % % % (178) Publishing 6, % 8, % 2, % 7, % % 8,839 7,014 (1,825) Facilities 4, % 4, % % 3, % (575) -15.6% 4,666 3,678 (988) Transfers 1, % (1,014) -1.8% (2,440) % (1,346) -2.7% (2,772) 205.9% (1,014) (1,346) (332) Other Expenses 8, % 8, % (83) -1.0% 7, % (1,155) -16.4% 8,097 7,024 (1,072) Total Expenses $ 60, % $ 63, % $ 3, % $ 52, % $ (7,658) -14.6% $ 63,280 $ 52,398 $ (10,882) Net s over/(under) Expenses $ (8,077) -15.5% $ (5,840) -10.2% $ (2,237) -38.3% $ (2,199) -4.4% $ (5,879) % $ (5,840) $ (2,199) $ (3,642) Net Change in Pension Liability other than Periodic Cost $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - $ - $ - Investment Income (2,798) -5.4% % (3,100) % 13, % (16,279) % ,481 (13,179) Reserve Transfers - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% Other Non-operating (40) -0.1% (17) 0.0% (22) % (19) 0.0% (21) 111.9% (17) (19) 1 Net change in Unrestricted Net Assets $ (10,915) -21.0% $ (5,556) -9.7% $ (5,359) -96.5% $ 11, % $ (22,179) % $ (5,556) $ 11,264 $ (16,819) Net Change in Temporarily Restricted Net Assets $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - $ - $ - Net Change in Permanently Restricted Net Assets $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - $ - $ - Net Change in Total Net Assets $ (10,915) -21.0% $ (5,556) -9.7% $ (5,359) -96.5% $ 11, % $ (22,179) % $ (5,556) $ 11,264 $ (16,819) Non-Operating Operating

14 American Bar Association Grant and Gifts Statements of Activities and Changes in Net Assets - Comparison to Budget and Prior Year Period Ending Preliminary August 31, (US $000's) Year-to-Date Full Year Description Actual FY vs. Budget Fav/(Unfav) Budget Actual FY 2014 Fav/(Unfav) Prior 2014 Full Year Fav/(Unfav) s Membership Dues $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - $ - $ - Meeting Fees % % % % (11) -1.3% (779) Advertising - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% Gifts, Grants, Contributions, and Sponsorships 37, % 36, % 1, % 35, % 2, % 36,839 35,617 1,222 Publications % % (9) -8.7% % (43) -31.5% (34) Royalties % - 0.0% % % % - 91 (91) Accreditation Fees - 0.0% - 0.0% - 0.0% % (75) % - 75 (75) Miscellaneous Other % % % % (11) -10.7% (38) Investment income from Operations 2 0.0% - 0.0% 2 0.0% 1 0.0% % - 1 (1) Designated Reserve for Operations - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% Net Assets Released from Restrictions 1, % % 1, % 1, % % 42 1,283 (1,241) Total s $ 40, % $ 37, % $ 3, % $ 38, % $ 2, % $ 37,064 $ 38,101 $ (1,037) Expenses Compensation $ 9, % $ 8, % $ (165) -1.9% $ 9, % $ % $ 8,847 $ 9,826 $ 979 Fringe Benefits and Payroll Taxes 2, % 2, % (47) -1.7% 2, % % 2,713 2, Professional Services 17, % 13, % (3,424) -25.0% 14, % (2,843) -19.9% 13,719 14, Meetings and Travel 7, % 6, % (929) -13.4% 7, % (388) -5.2% 6,931 7, Advertising and Marketing 1 0.0% 4 0.0% % 1 0.0% (0) -8.8% 4 1 (3) Publishing % % (171) % % % Facilities 2, % 2, % (223) -9.3% 2, % (179) -7.3% 2,416 2, Transfers (3,407) -8.4% (165) -0.4% 3, % % 3, % (165) Other Expenses 2, % 2, % (19) -0.7% 2, % (350) -14.0% 2,822 2,492 (331) Total Expenses $ 39, % $ 37, % $ (1,733) -4.6% $ 40, % $ 1, % $ 37,385 $ 40,262 $ 2,877 Net s over/(under) Expenses $ 1, % $ (321) -0.9% $ 1, % $ (2,161) -5.7% $ 3, % $ (321) $ (2,161) $ 1,840 Net Change in Pension Liability other than Periodic Cost $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - 0.0% $ - $ - $ - Investment Income (38) -0.1% - 0.0% (38) 0.0% % (406) % (368) Reserve Transfers - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% Other Non-operating (848) -2.1% - 0.0% (848) 0.0% (0) 0.0% (848) % - (0) 0 Net change in Unrestricted Net Assets $ % $ (321) -0.9% $ 1, % $ (1,793) -4.7% $ 2, % $ (321) $ (1,793) $ 1,472 Net Change in Temporarily Restricted Net Assets $ % $ - 0.0% $ % $ % $ (936) -96.2% $ - $ 974 $ (974) Net Change in Permanently Restricted Net Assets $ % $ - 0.0% $ % $ 9 0.0% $ % $ - $ 9 $ (9) Net Change in Total Net Assets $ % $ (321) -0.9% $ 1, % $ (811) -2.1% $ 1, % $ (321) $ (811) $ 490 Non-Operating Operating