PERIODIC BUDGET DISCUSSION & ANALYSIS

Transcription

1 PERIODIC BUDGET DISCUSSION & ANALYSIS Date: Tuesday, May 1, 2012 To: cc: From: Rusty Gregory, Chief Fiscal Officer, CTTC Moss Adams, LLP, CPA CTTC Board of Commissioners Caroline Beteta, President & Chief Executive Officer Subject: Periodic Budget Discussion & Analysis for Reports as of February 29, 2012 Each year the Commission approves an annual budget for marketing and operational expenses. At each Commission meeting financial statements are presented to report on the status of revenues received and funds spent as of the date of the financial statements. Due to the unique nature of the CTTC and its funding sources, revenues and expenses are budgeted on an annual basis and adjusted throughout the year as deemed appropriate by the Commission. Accordingly, rather than preparing monthly budgets, the Executive Committee has determined that the annual budget will be included on both interim financial statements as well as on the year- end financial statements. All statements will reflect the percentage of the annual budget that has been received or spent on each line item as of the statement date. As of February 29, 2012, 67% of the fiscal year had passed. Enclosed herewith are the following reports: - California Tourism Budget Report (Cash Basis) as of CTTC Financial Statements as of These reports are respectfully being presented at the request of the Commission in formats consistent with the legal requirements of the program. As requested, the CTTC financial statements include comparative data for the prior fiscal year. This concludes the Periodic Budget Discussion and Analysis report and, as always, we are available to answer any questions you may have.

2 CALIFORNIA TOURISM BUDGET REPORT FISCAL YEAR CTTC FY BUDGET CO- OP/ SPONSORSHIP/ REGISTRATION FUNDS RECEIVED INCREMENTAL FUNDS/CTTC FUNDS FROM PRIOR YEARS TOTAL BUDGET FY YTD ACTUAL BALANCE % USED CTTC INCOME Rental Car Assessment Income $39,500,000 $39,500,000 $29,585,777 $9,914, % Other Industry Assessment Income $10,000,000 $10,000,000 $7,294,059 $2,705, % Refunds and Adjustments $0 $0 ($8,899) $8,899 State Funding $200,000 $200,000 $0 $200, % Interest & Dividend Income $150,000 $150,000 $59,238 $90, % Publication Income and Royalties $150,000 $150,000 $5,378 $144, % Co- op Partner Financial Contributions $0 $0 $432,537 ($432,537) TOTAL CURRENT YEAR INCOME $50,000,000 $50,000,000 $37,368,090 $12,631, % DOMESTIC MARKETING Brand Advertising Offline Media $13,785,000 $3,200,000 $16,985,000 $13,585,827 $3,399, % Online Media $1,565,000 $500,000 $2,065,000 $848,283 $1,216, % Production/Other $3,305,000 $3,293,000 $6,598,000 $3,059,232 $3,538, % Research $245,000 $245,000 $43,734 $201, % Total Brand Advertising $18,900,000 $0 $6,993,000 $25,893,000 $17,537,076 $8,355, % Interactive Website Production (Design & Development) $500,000 $257,000 $757,000 $97,775 $659, % Total Web and Interactive $500,000 $0 $257,000 $757,000 $97,775 $659, % Co- op/promotions Domestic Advertising Co- op $150,000 $17,813 $167,813 $15,029 $152, % Rural $290,000 $290,000 $130,885 $159, % Tour of California $350,000 $350,000 $0 $350, % Total Co- op/promotions $790,000 $17,813 $0 $807,813 $145,914 $661, % Publications & Fulfillment Fulfillment Contractor $225,000 $225,000 $58,053 $166, % Fulfillment Postage $350,000 $350,000 $177,340 $172, % Official State Map $225,000 $225,000 $50 $224, % Total Publications & Fulfillment $800,000 $0 $0 $800,000 $235,443 $564, % Communications Digital Assets $220,000 $80,000 $300,000 $100,630 $199, % Domestic Press Events $180,000 $12,500 $192,500 $151,177 $41, % Industry/Media Newsletters $165,000 $165,000 $90,106 $74, % Media Fams/Visits $75,000 $75,000 $20,442 $54, % Newsclipping Service $20,000 $20,000 $13,286 $6, % PR Agency and Consultants $400,000 $400,000 $227,079 $172, % PR Promotions $160,000 $16,000 $40,000 $216,000 $100,018 $115, % Press Kits $30,000 $29,000 $59,000 $26,396 $32, % Public Affairs $75,000 $65,000 $140,000 $93,352 $46, % Total Communications $1,325,000 $28,500 $214,000 $1,567,500 $822,486 $745, %

3 CALIFORNIA TOURISM BUDGET REPORT FISCAL YEAR CTTC FY BUDGET CO- OP/ SPONSORSHIP/ REGISTRATION FUNDS RECEIVED INCREMENTAL FUNDS/CTTC FUNDS FROM PRIOR YEARS TOTAL BUDGET FY YTD ACTUAL BALANCE % USED Industry Relations Field Representatives $420,000 $420,000 $144,301 $275, % Industry Events $350,000 $6,004 $356,004 $239,235 $116, % Industry Outreach $190,000 $190,000 $127,895 $62, % Industry Site Development and Maintanence $35,000 $35,000 $0 $35, % Promotional Items $125,000 $630 $125,630 $77,283 $48, % Referendum Campaign $140,000 $140,000 $0 $140, % Tourism Development $70,000 $70,000 $32,911 $37, % Total Industry Relations $1,330,000 $6,634 $0 $1,336,634 $621,625 $715, % Travel Trade Domestic Trade Shows/Promotions $30,000 $3,750 $33,750 $49,104 ($15,354) % Fam Tours $30,000 $30,000 $9,234 $20, % Total Travel Trade $60,000 $3,750 $0 $63,750 $58,338 $5, % Research Bulletins and Special Studies $120,000 $120,000 $70,554 $49, % Domestic Market Research $150,000 $150,000 $52,123 $97, % Economic Impact Analysis $130,000 $130,000 $38,000 $92, % Marketing Effectiveness & ROI $100,000 $100,000 $7,000 $93, % Total Research $500,000 $0 $0 $500,000 $167,677 $332, % Welcome Centers Welcome Centers $30,000 $750 $26,000 $56,750 $32,933 $23, % Total Welcome Centers $30,000 $750 $26,000 $56,750 $32,933 $23, % Depreciation Expense Web site Development $0 $0 $0 $0 $89,131 ($89,131) Marketing $0 $0 $11,371 ($11,371) Infastructure - Web $0 $100,000 $100,000 $19,654 $80, % Total Depreciation Expense $0 $0 $100,000 $100,000 $120,156 ($20,156) % SUBTOTAL - DOMESTIC $24,235,000 $57,447 $7,590,000 $31,882,447 $19,839,423 $12,043, % INTERNATIONAL MARKETING United Kingdom UK Brand Advertising $3,943,000 $600,000 $4,543,000 $4,396,482 $146, % UK Co- op/promotions $400,000 $400,000 $7,997 $392, % UK Technology $140,000 $140,000 $67,988 $72, % UK Communications $182,000 $182,000 $77,522 $104, % UK Travel Trade $450,000 $110,285 $560,285 $421,870 $138, % UK Research $100,000 $100,000 $20,348 $79, % UK Admin & Overhead $685,000 $685,000 $399,583 $285, % UK Publications/Fulfillment $100,000 $100,000 $26,982 $73, % Total United Kingdom $6,000,000 $110,285 $600,000 $6,710,285 $5,418,772 $1,291, % Japan Japan Co- op/promotions $100,000 $100,000 $0 $100, % Japan Technology $587,000 $587,000 $287,994 $299, % Japan Communications $140,000 $140,000 $15,812 $124, % Japan Travel Trade $138,000 ($3,500) $134,500 $18,128 $116, % Japan Research $40,000 $40,000 $0 $40, % Japan Admin & Overhead $485,000 $485,000 $202,083 $282, % Japan Publications/Fulfillment $10,000 $10,000 $450 $9, % Total Japan $1,500,000 ($3,500) $0 $1,496,500 $524,467 $972, %

4 CALIFORNIA TOURISM BUDGET REPORT FISCAL YEAR CTTC FY BUDGET CO- OP/ SPONSORSHIP/ REGISTRATION FUNDS RECEIVED INCREMENTAL FUNDS/CTTC FUNDS FROM PRIOR YEARS TOTAL BUDGET FY YTD ACTUAL BALANCE % USED Germany Germany Co- op/promotions $285,000 $285,000 $85,338 $199, % Germany Technology $145,000 $145,000 $83,206 $61, % Germany Communications $110,000 $110,000 $39,272 $70, % Germany Travel Trade $200,000 $29,446 $229,446 $88,279 $141, % Germany Admin & Overhead $380,000 $380,000 $221,669 $158, % Germany Publications/Fulfillment $30,000 $30,000 ($7,044) $37, % Total Germany $1,150,000 $29,446 $0 $1,179,446 $510,720 $668, % Australia/New Zealand Australia/NZ Brand Advertising $1,200,000 $500,000 $1,700,000 $823,852 $876, % Australia/NZ Co- op/promotions $345,000 $345,000 $129,137 $215, % Australia/NZ Technology $12,000 $12,000 $11,968 $ % Australia/NZ Communications $157,000 $157,000 $54,090 $102, % Australia/NZ Travel Trade $276,000 $30,134 $61,000 $367,134 $200,554 $166, % Australia/NZ Research $35,000 $35,000 $28,149 $6, % Australia/NZ Admin & Overhead $450,000 $450,000 $225,000 $225, % Australia/NZ Publications/Fulfillment $25,000 $25,000 $1,946 $23, % Total Australia/New Zealand $2,500,000 $30,134 $561,000 $3,091,134 $1,474,696 $1,616, % Canada Canada Brand Advertising $2,110,000 $225,000 $2,335,000 $1,198,131 $1,136, % Canada Co- op/promotions $0 $0 $150,000 ($150,000) #DIV/0! Canada Technology $40,000 $40,000 $45 $39, % Canada Communications $150,000 $150,000 ($92,696) $242, % Canada Travel Trade $0 $0 $688 ($688) #DIV/0! Canada Research $0 $0 $35,000 ($35,000) #DIV/0! Canada Admin & Overhead $0 $0 $0 $0 #DIV/0! Total Canada $2,300,000 $0 $225,000 $2,525,000 $1,291,168 $1,233, % Mexico Mexico Brand Advertising $225,000 $225,000 $143,981 $81, % Mexico Co- op/promotions $120,000 $120,000 $0 $120, % Mexico Technology $75,000 $75,000 $0 $75, % Mexico Communications $95,000 $95,000 $1,088 $93, % Mexico Travel Trade $125,000 ($1,650) $123,350 $35,661 $87, % Mexico Research $0 $0 $0 $0 Mexico Admin & Overhead $240,000 $240,000 $100,000 $140, % Mexico Publications/Fulfillment $20,000 $20,000 $7,152 $12, % Total Mexico $900,000 ($1,650) $0 $898,350 $287,882 $610, % So. Korea So. Korea Co- op/promotions $40,000 $40,000 $63,753 ($23,753) % So. Korea Technology $143,000 $143,000 $130,596 $12, % So. Korea Communications $70,000 $70,000 $96,105 ($26,105) % So. Korea Travel Trade $190,000 $190,000 $38,884 $151, % So. Korea Admin & Overhead $307,000 $307,000 $153,498 $153, % So. Korea Publications/Fulfillment $50,000 $50,000 $2,024 $47, % Total So. Korea $800,000 $0 $0 $800,000 $484,860 $315, %

5 CALIFORNIA TOURISM BUDGET REPORT FISCAL YEAR CTTC FY BUDGET CO- OP/ SPONSORSHIP/ REGISTRATION FUNDS RECEIVED INCREMENTAL FUNDS/CTTC FUNDS FROM PRIOR YEARS TOTAL BUDGET FY YTD ACTUAL BALANCE % USED China Markets China Co- op/promotions $0 $0 $0 $0 China Technology $95,000 $95,000 $9,849 $85, % China Communications $44,700 $44,700 $24,664 $20, % China Travel Trade $202,700 $202,700 $119,272 $83, % China Research $0 $0 $0 $0 China Admin & Overhead $312,900 $312,900 $156,482 $156, % China Publications/Fulfillment $44,700 $44,700 $7,008 $37, % Total China Mkts $700,000 $0 $0 $700,000 $317,275 $382, % Secondary/Emerging Markets S/E Brand Advertising $0 $0 $0 $0 S/E Co- op/promotions $126,000 $126,000 $520 $125, % S/E Technology $77,600 $77,600 $46,437 $31, % S/E Communications $70,900 $70,900 $24,461 $46, % S/E Travel Trade $138,200 $51,326 $500 $190,026 $91,569 $98, % S/E Research $16,000 $16,000 $16,000 $ % S/E Admin & Overhead $333,300 $333,300 $179,585 $153, % S/E Publications & Fulfillment $38,000 $38,000 $3,280 $34, % Total Secondary/Emerging Mkts $800,000 $51,326 $500 $851,826 $361,852 $489, % Other International Marketing Global Project Extension $0 $2,200,000 $2,200,000 $632,333 $1,567, % Global Research Reports $65,000 $80,000 $145,000 $93,962 $51, % International Marketing Development $35,000 $35,000 $2,666 $32, % International Photography and B- Roll $40,000 $40,000 $27,545 $12, % International Publications and Fulfillment $50,000 $50,000 $11,083 $38, % International Web site Maintenance $50,000 $50,000 $3,938 $46, % Online Training Maintenance $30,000 $30,000 $0 $30, % POW WOW Booth/Branding $200,000 $200,000 $66,602 $133, % POW WOW Creative/Deliverables $100,000 $100,000 $8,603 $91, % POW WOW Fams/Promotions $90,000 $434 $90,434 $3,825 $86, % POW WOW Sponsorship $300,000 $300,000 $300,000 $ % Travel Trade Development $140,000 $100,000 $240,000 $115,941 $124, % Travel Trade Portal Localization $100,000 $100,000 $68,065 $31, % Travel Trade Tools $50,000 $50,000 $1,083 $48, % Total Other Int'l Marketing $1,250,000 $434 $2,380,000 $3,630,434 $1,335,646 $2,294, % SUBTOTAL INT'L MARKETING $17,900,000 $216,475 $3,766,500 $21,882,975 $12,007,338 $9,875, % MARKETING RESERVE $0 $0 TOTAL MARKETING $42,135,000 $273,922 $11,356,500 $53,765,422 $31,846,761 $21,918, %

6 CALIFORNIA TOURISM BUDGET REPORT FISCAL YEAR CTTC FY BUDGET CO- OP/ SPONSORSHIP/ REGISTRATION FUNDS RECEIVED INCREMENTAL FUNDS/CTTC FUNDS FROM PRIOR YEARS TOTAL BUDGET FY YTD ACTUAL BALANCE % USED OPERATIONS Accounting $65,000 $65,000 $60,661 $4, % Audit $20,000 $20,000 $20,328 ($328) % Computers/Office Equip $200,000 $200,000 $142,370 $57, % Database $15,000 $15,000 $0 $15, % Depreciation $100,000 $100,000 $49,861 $50, % General Expense $100,000 $100,000 $68,873 $31, % Insurance $50,000 $50,000 $13,120 $36, % Legal Services $200,000 $200,000 $590,377 ($390,377) % Meals and Entertainment $20,000 $20,000 $18,861 $1, % Meetings $100,000 $100,000 ($28,577) $128, % Memberships $5,000 $5,000 $5,185 ($185) % Move Expense $50,000 $800 $50,800 $80,625 ($29,825) % Office Supplies $45,000 $17 $45,017 $24,151 $20, % Postage and Printing $100,000 $100,000 $74,940 $25, % Rent $350,000 $350,000 $385,171 ($35,171) % Salaries and Benefits $3,950,000 $6,638 $3,956,638 $2,427,851 $1,528, % Teleconferences $15,000 $15,000 $7,047 $7, % Telephone $115,000 $115,000 $79,714 $35, % Temporary Employee's $115,000 $115,000 $56,279 $58, % Training $30,000 $30,000 $31 $29, % Travel - Commissioners $20,000 $20,000 $1,054 $18, % Travel - Executive/Staff $375,000 $375,000 $303,987 $71, % Total Operations $6,040,000 $7,455 $0 $6,047,455 $4,381,909 $1,665, % ASSESSMENT ADMIN Salaries and Benefits $380,000 $380,000 $240,252 $139, % General Expense $400,000 $400,000 $36,320 $363, % Consultant Services $45,000 $45,000 $1,375 $43, % Hardware/Software Purchases & Maintenance $0 $0 $26,347 ($26,347) Total Assessment $825,000 $0 $0 $825,000 $304,294 $520, % Capitol Budget Adjustments Capitol Expenditures - Equipment ($100,000) ($100,000) $0 ($100,000) 0.00% Add Back Depreciation $100,000 $100,000 $0 $100,000 Total Capitol Budget Adjustments $0 $0 $0 $0 $0 $0 0.00% CTTC OPERATIONS RESERVE $1,000,000 $0 $0 $1,000,000 $0 $1,000, % GAIN/LOSS ON ASSET DISPOSAL $0 $0 $0 $0 $5,133 ($5,133) 0.00% TOTAL OP/ASSESS/RES $7,865,000 $7,455 $0 $7,872,455 $4,691,336 $3,181, % TOTAL $50,000,000 $281,377 $11,356,500 $61,637,877 $36,538,097 $25,099, %

7 Accountant s Compilation Report and Financial Statements with Supplementary Schedules Visit California For the Eight Months Ended February 29, 2012 and February 28, 2011

8 CONTENTS PAGE ACCOUNTANT S COMPILATION REPORT 1 FINANCIAL STATEMENTS Statements of financial position 2 Statements of activities 3 Statements of cash flows 4 SUPPLEMENTARY SCHEDULES Schedule 1 Schedule of assets internally designated for reserves 6 8 Schedule 2 Schedule of activities budget and actual 9 Schedule 3 Comparative schedule of marketing and program expenses Schedule 4 Schedule of marketing and program expenses budget and actual 13 15

9 ACCOUNTANT S COMPILATION REPORT To the Board of Commissioners Visit California We have compiled the accompanying statements of financial position of Visit California (the Commission) as of February 29, 2012 and February 28, 2011 and the related statements of activities and cash flows for the eight months then ended. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or provide any assurance about whether the financial statements are in accordance with accounting principles generally accepted in the United States of America. Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements. Our responsibility is to conduct the compilation in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. The objective of a compilation is to assist management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements. Management has elected to omit substantially all of the disclosures required by accounting principles generally accepted in the United States. If the omitted disclosures were included in the financial statements, they might influence the users conclusions about the Commission s financial position, changes in net assets, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters. The accompanying supplementary information appearing on pages 6 to 15, except for the supplementary annual budget information appearing on pages 9 and 13 to 15, is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information has been compiled from information that is the representation of management. We have not audited or reviewed the supplementary information and, accordingly, do not express an opinion or provide any assurance on such supplementary information. The accompanying supplementary annual budget information appearing on pages 9 and 13 to 15, is presented for purposes of additional analysis and is not a required part of the basic financial statements. We have not complied or reviewed the unaudited supplementary annual budget information, and, accordingly, do not express an opinion or any form of assurance on it. We are not independent with respect to the Commission. Sacramento, California May 3, 2012

10 STATEMENTS OF FINANCIAL POSITION 2/29/12 2/28/11 ASSETS Current assets: Petty cash $ 250 $ 100 Cash in bank 11,913,634 10,734,943 Cash in bank Industry Promo 110, ,299 Cash in bank Wells Fargo Securities 4,246,734 4,153,171 Investments (Schedule 1) 4,349,028 4,349,028 Receivables 3,837,598 1,497,815 Total current assets 24,457,543 20,845,356 Fixed assets: Office equipment 661, ,553 Infrastructure 241,671 Software and website 1,180,147 1,180,147 Leasehold improvements 279,207 32,899 Accumulated depreciation (1,488,914) (1,203,707) Net fixed assets 873, ,892 Other assets: Other prepaids 117,140 13,514 Deposits 324,964 18,313 Total other assets 442,104 31,827 TOTAL ASSETS $ 25,773,183 $ 21,315,075 LIABILITIES AND NET ASSETS Current liabilities: Accounts payable $ 74,030 $ 135,831 Accrued expenses 4,562,116 5,334,521 Deferred rent 254,797 34,741 Employee flexible spending account 4,024 (850) 401(k) loan payable (k) employee deferral 6,671 7,771 Total current liabilities 4,902,256 5,512,014 Net assets: Unrestricted: Designated board reserve 4,349,028 4,349,028 Unrestricted fund 13,887,310 9,056,536 Current excess 2,634,589 2,397,497 Total net assets 20,870,927 15,803,061 TOTAL LIABILITIES AND NET ASSETS $ 25,773,183 $ 21,315,075 See accountant s compilation report 2

11 STATEMENTS OF ACTIVITIES For the Eight For the Eight Months Ended Months Ended 2/29/12 2/28/11 Variance % Diff REVENUES: Rental assessment income $ 31,014,982 $ 31,715,422 $ ( 700,440 ) (2.21%) Other industry assessment income 7,294,059 6,368, , % Refunds (8,899) (13,711) 4,812 (35.10%) Interest and dividend income 59,238 43,260 15, % Publication income and royalties 5, ,960 (150,582) (96.55%) Co op partner contributions 807, ,213 (95,173) (10.55%) TOTAL REVENUES 39,171,798 39,171,956 (158) (0.00%) EXPENDITURES: Marketing and program expenses (Schedules 3 and 4) 31,845,873 32,714,350 (868,477) (2.65%) Operating expenses: Accounting 60,661 33,167 27, % Audit 20,328 23,162 (2,834) (12.24%) Computer/office equipment 142, ,007 (15,637) (9.90%) Depreciation expense 49,861 48,781 1, % General expense 68,873 57,649 11, % Insurance 13,120 6,576 6, % Legal services 590, , , % Meals and entertainment 18,861 4,727 14, % Meetings (28,577) 47,544 (76,121) (160.11%) Memberships 5,185 4, % Move expense 76,057 76, % Office supplies 24,151 16,932 7, % Printing and postage 79,508 63,809 15, % Rent 385, , , % Salaries and benefits 2,427,851 2,048, , % Teleconferences 7,047 10,443 (3,396) (32.52%) Telephone 79,714 74,928 4, % Temporary staffing 56, ,855 (65,576) (53.81%) Training 31 13,194 (13,163) (99.77%) Travel executive/staff 303, ,985 38, % Travel CTTC commissioners 1,054 12,891 (11,837) (91.82%) Total operating expenses 4,381,909 3,587, , % Assessment administration: Personnel services 240, ,691 (84,439) (26.01%) General operating expenses 36,320 84,749 (48,429) (57.14%) Hardware/software purchase/maintenance 26,347 25,129 1, % Consultant services 1,375 37,776 (36,401) (96.36%) Disposal of assets 5,133 5, % Total assessment administration expenses 309, ,345 (162,918) (34.49%) TOTAL OPERATIONS AND ASSESSMENT EXPENDITURES 4,691,336 4,060, , % CHANGE IN UNRESTRICTED NET ASSETS $ 2,634,589 $ 2,397,497 $ 237, % See accountant s compilation report 3

12 STATEMENTS OF CASH FLOWS FOR THE EIGHT MONTHS ENDED 2/29/12 2/28/11 CASH FLOWS, OPERATIONS Change in unrestricted net assets $ 2,634,589 $ 2,397,497 Adjustments to reconcile change in unrestricted net assets to net cash flow from operating activities: Depreciation and amortization expense 170, ,259 Other receivables (1,780,626) 269,326 Other prepaids 615,880 33,479 Deposits 18,313 Accounts payable and accrued expenses (1,516,864) 1,883,106 Deferred rent 225,103 (7,942) Other payroll liabilities FSA 2,475 5, (k) employee deferrals 7,288 (7,463) NET CASH FLOWS, OPERATIONS 376,175 4,825,639 CASH FLOWS, INVESTING Purchase certificates of deposit (732,147) (4,148,195) Purchase of fixed assets (491,577) (11,724) NET CASH FLOWS, INVESTING ( 1,223,724 ) (4,159,919) DECREASE IN CASH AND CASH EQUIVALENTS (847,549) 665,720 CASH AND CASH EQUIVALENTS, AS OF JUNE 30 12,924,124 10,184,599 CASH AND CASH EQUIVALENTS, AS OF FEBRUARY 29, 2012 AND FEBRUARY 28, 2012 $ 12,076,575 $ 10,850,319 CASH AND CASH EQUIVALENTS Petty cash $ 250 $ 100 Cash in bank Wells Fargo 11,913,634 10,734,944 Cash in bank Industry Promo 110, ,299 Cash in bank Wells Fargo Securities 52,392 4,976 TOTAL CASH AND CASH EQUIVALENTS $ 12,076,575 $ 10,850,319 See accountant s compilation report 4

13 SUPPLEMENTARY SCHEDULES

14 SCHEDULE 1 SCHEDULE OF ASSETS INTERNALLY DESIGNATED FOR RESERVES FEBRUARY 29, 2012 CASH AND INVESTMENTS INTERNALLY DESIGNATED FOR OPERATING RESERVE: Cost Value at Maturity Cardinal Bank CD, coupon 1.0%, due June 18, 2012 $ 200,000 $ 200,000 Bank of Jackson Hole CD, coupon 1.0%, due June 25, , ,000 Barclay's Bank CD, coupon 2.35%, due September 10, , ,903 Bank of China CD, coupon 0.75%, due September 10, , ,362 (Designated portion operating reserve of securities purchased for a total of $250,000) Citibank Natl Assn CD, coupon 0.70%, due September 24, , ,000 First St Cmnty Bk CD, coupon 0.75%, due September 24, , ,000 Merrick Bank CD, coupon 0.65%, due September 24, ,662 30,662 (Designated portion operating reserve of securities purchased for a total of $100,000) BMW Bk North Amer CD, coupon 1.95%, due May 21, , ,306 Goldman Sachs Bk USA CD, coupon 1.70%, due June 3, , ,000 Discover Bank CD, coupon 0.75%, due July 29, , ,000 Synovus Bank CD, coupon 1.20%, due August 26, , ,005 Heritage Bank Comm CD, coupon 1.05%, due January 31, , ,000 GE Capital Finl Inc CD, coupon 1.25%, due May 16, ,000 59,000 Town Bk CD, coupon 1.50%, due June 7, , ,000 Total cash and investments internally designated for operating reserve 2,542,238 2,542,238 See accountant s compilation report 6

15 SCHEDULE 1 SCHEDULE OF ASSETS INTERNALLY DESIGNATED FOR RESERVES (CONTINUED) FEBRUARY 29, 2012 CASH AND INVESTMENTS INTERNALLY DESIGNATED FOR MARKETING RESERVE: Cost Value at Maturity Merrick Bk CD, coupon 1.25%, due April 20, , ,000 Bank of America CD, coupon 1.3%, due April 23, , ,000 First St Bk & Tr Co CD, coupon 1.3%, due April 23, , ,000 First Coml Bk CD, coupon 1.25%, due April 30, , ,000 Johnson Bank CD, coupon 0.70%, due September 4, , ,000 Bank of China CD, coupon 0.75%, due September 10, ,638 24,638 (Designated portion marketing reserve of securities purchased for a total of $250,000) Timberwood Bank CD, coupon 1.20%, due July 16, , ,656 Lake Fst Bk & Tr Co CD, coupon 1.40%, due July 22, , ,518 First Priority Bank CD, coupon 0.80%, due August 9, , ,000 1st Source Bank CD, coupon 1.0%, due September 16, , ,000 Franklin Sec Bk CD, coupon 0.95%, due October 15, , ,000 Cardinal Bank CD, coupon 1.0%, due January 21, ,978 49,978 Total cash and investments internally designated for marketing reserve 1,806,790 1,806,790 Total cash and investments internally designated $ 4,349,028 $ 4,349,028 See accountant s compilation report 7

16 SCHEDULE 1 SCHEDULE OF ASSETS INTERNALLY DESIGNATED FOR RESERVES (CONTINUED) FEBRUARY 29, 2012 UNDESIGNATED CASH AND INVESTMENTS: Value at Cost Maturity Merrick Bank CD, coupon 0.65%, due September 24, 2012 $ 69,338 $ 69,338 (Undesignated portion of securities purchased for a total of $100,000) Bank of Northn Mi CD, coupon 1.25%, due September 28, , ,614 State Bank India CD, coupon 0.90%, due October 1, , ,000 Barclay's Bk Delaware CD, coupon 2.45%, due October 29, , ,086 Bank of America NA CD, coupon 1.8%, due March 11, ,411 81,411 State Bk & Tr Co Dallas CD, coupon 0.8%, due March 11, , ,000 First Business Bk CD, coupon 1.35%, due June 4, , ,656 Goldman Sachs Bk USA CD, coupon 1.7%, due June 10, ,266 50,266 Israel Disc Bk CD, coupon 1.35%, due June 10, , ,306 Ally Bank CD, coupon 0.70%, due July 29, , ,000 First Priority Bank CD, coupon 0.80%, due August 9, ,000 29,000 BMW Bank North Amer CD, coupon 1.6%, due August 13, ,543 50,543 GE Money Bank CD, coupon 1.55%, due August 13, ,147 76,147 Plains Capital Bank CD, coupon 1.3%, due August 19, , ,209 Domestic Bank CD, coupon 1.0%, due August 27, , ,005 Evergreen Bank Group CD, coupon 0.95%, due August 27, , ,642 Farm Bur Bk FSB CD, coupon 0.90%, due September 10, ,005 99,005 Medallion Bank CD, coupon 1.0%, due September 10, , ,000 Marlin Business Bank CD, coupon 1.0%, due September 23, , ,000 MetLife Bk Natl Assn CD, coupon 1.25%, due October 21, , ,000 Safra Natl Bank CD, coupon 1.0%, due January 21, , ,743 American Exp Cent Bk CD, coupon 1.0%, due January 28, , ,000 GE Capital Finl Inc CD, coupon 1.05%, due January 29, , ,000 GE Capital Retail Bk CD, coupon 1.25%, due May 16, , ,000 United Fidelity Bank CD, coupon 0.70%, due March 28, , ,000 Tristate Cap Bank CD, coupon 1.1%, due January 21, , ,371 Wells Fargo Bank Deposit Sweep # ,442 27,442 Wells Fargo Bank Deposit Sweep # ,950 24,950 Total undesignated cash and investments $ 4,246,734 $ 4,246,734 See accountant s compilation report 8

17 SCHEDULE 2 SCHEDULE OF ACTIVITIES BUDGET AND ACTUAL FOR THE EIGHT MONTHS ENDED FEBRUARY 29, 2012 For the Eight Annual Months Ended Budget 2/29/2012 Balance % Used REVENUES Rental assessment income $ 39,500,000 $ 31,014,982 $ 8,485, % Other industry assessment income 10,000,000 7,294,059 2,705, % State funding 200, , % Publication income and royalties 150,000 5, , % Co op partner contributions 807,040 (807,040) 0.00% Interest and dividend income 150,000 59,238 90, % Refunds (8,899) 8, % Carryover funds 11,537,877 11,537, % TOTAL REVENUES 61,537,877 39,171,798 22,366, % EXPENDITURES Marketing and program expenses (Schedule 3) 53,765,422 31,845,873 21,919, % Operating expenses: Accounting 65,000 60,661 4, % Audit 20,000 20,328 (328) % Computer/office equipment 200, ,370 57, % Database 15,000 15, % Depreciation expense 100,000 49,861 50, % General expense 100,000 68,873 31, % Insurance 50,000 13,120 36, % Legal services 200, ,377 (390,377) % Meals and entertainment 20,000 18,861 1, % Meetings 100,000 (28,577) 128,577 (28.58%) Memberships 5,000 5,185 (185) % Move expense 50,800 76,057 (25,257) % Office supplies 45,017 24,151 20, % Printing and postage 100,000 79,508 20, % Rent 350, ,171 (35,171) % Salaries and benefits 3,956,638 2,427,851 1,528, % Teleconferences 15,000 7,047 7, % Telephone 115,000 79,714 35, % Temporary staffing 115,000 56,279 58, % Training 30, , % Travel executive/staff 375, ,987 71, % Travel CTTC commissioners 20,000 1,054 18, % Total operating expenses 6,047,455 4,381,909 1,665, % Assessment administration: Personnel services 380, , , % General operating expenses 400,000 36, , % Hardware/software purch/maint 26,347 (26,347) 0.00% Consultant services 45,000 1,375 43, % Disposal of assets 5,133 (5,133) 0.00% Total assessment administration expenses 825, , , % Capital budget adjustments (100,000) (100,000) 0.00% Operations reserve 1,000,000 1,000, % 900, , % TOTAL OPERATIONS AND ASSESSMENT EXPENDITURES 7,772,455 4,691,336 3,081, % TOTAL EXPENDITURES 61,537,877 36,537,209 25,000, % CHANGE IN UNRESTRICTED NET ASSETS $ $ 2,634,589 $ (2,634,589) 0.00% See accountant s compilation report 9

18 SCHEDULE 3 COMPARATIVE SCHEDULE OF MARKETING AND PROGRAM EXPENSES For the Eight For the Eight Months Ended Months Ended 2/29/12 2/28/11 Variance % Diff Advertising $ 6,125 $ 17,623,014 $ (17,616,889) (99.97%) Advertising media 13,579,701 13,579, % Advertising production 3,059,232 3,059, % Advertising research 43,734 43, % Interactive advertising 1,172,634 (1,172,634) 0.00% Interactive media 848, , % Interactive production 97,775 97, % Domestic advertising co op 15,029 10,249 4, % Rural marketing co op 130, ,553 (33,668) (20.46%) Tourism development 32,911 32, % Fulfillment contractor 58,053 58,848 (795) (1.35%) Fulfillment postage 177,340 93,783 83, % Depreciation expense web site development 89, ,478 (114,347) (56.20%) Official site map ,553 (222,503) (99.98%) Digital assets 100,630 66,044 34, % Domestic press events 151, ,259 (31,082) (17.05%) Field representatives 144, ,498 (28,197) (16.35%) Industry events 239, ,734 85, % Promotional items 77, ,952 (46,669) (37.65%) Industry site development and maintenance 6,450 (6,450) 0.00% Industry/media newsletters 90,106 49,044 41, % Industry outreach 127, ,878 (92,983) (42.10%) Media FAMS/visits 19,555 26,162 (6,607) (25.25%) Newsclipping service 13,286 16,498 (3,212) (19.47%) Public affairs 93,352 93, % Niche/seasonal outreach 62,469 (62,469) 0.00% PR promotions 100, , % PR agency and consultants 227, ,994 30, % Press kits 26, ,097 8,728.09% Domestic trade shows/promos 49,104 33,602 15, % Fam tours 9,234 9,729 (495) (5.09%) Bulletins and special studies 70,554 22,760 47, % Economic impact analysis 38,000 30,900 7, % Domestic market research 52,123 64,800 (12,677) (19.56%) Marketing effectiveness & ROI 7,000 32,500 (25,500) (78.46%) Welcome centers 32,933 29,643 3, % UK brand advertising 4,396,482 3,965, , % UK co op/promotions 7, ,340 (94,343) (92.19%) UK technology 67,988 31,319 36, % UK communications 77,522 63,572 13, % UK travel trade 421, , , % UK research 20,348 20, % UK admin and overhead 399, ,169 77, % See accountant s compilation report 10

19 SCHEDULE 3 COMPARATIVE SCHEDULE OF MARKETING AND PROGRAM EXPENSES (CONTINUED) For the Eight For the Eight Months Ended Months Ended 2/29/12 2/28/11 Variance % Diff UK publications/fulfillment 26,982 24,814 2, % Japan co op/promotions 112,728 (112,728) 0.00% Japan technology 287, ,040 (90,046) (23.82%) Japan communications 15,812 94,011 (78,199) (83.18%) Japan travel trade 18,128 95,014 (76,886) (80.92%) Japan research 40,015 (40,015) 0.00% Japan admin and overhead 202, ,376 (111,293) (35.51%) Japan publications/fulfillment 450 6,959 (6,509) (93.53%) Germany co op/promotions 85, ,478 (50,140) (37.01%) Germany technology 83,206 40,124 43, % Germany communications 39,272 20,205 19, % Germany travel trade 88, ,793 (36,514) (29.26%) Germany admin and overhead 221, ,500 24, % Germany publications/fulfillment (7,044) 19,760 (26,804) (135.65%) Australia/NZ brand advertising 823,852 1,623,482 (799,630) (49.25%) Australia/NZ co op promotions 129,137 27, , % Australia/NZ technology 11,968 18,023 (6,055) (33.60%) Australia/NZ communications 54,090 22,956 31, % Australia/NZ travel trade 200, ,788 (21,234) (9.57%) Australia/NZ research 28,149 17,929 10, % Australia admin and overhead 225, ,344 18, % Australia/NZ publications/fulfillment 1,946 19,509 (17,563) (90.03%) Canada brand advertising 1,198,131 1,063, , % Canada co op/promotions 150,000 41, , % Canada technology (230) (83.64%) Canada communications (92,696) 62,143 (154,839) (249.17%) Canada travel trade 688 3,154 (2,466) (78.19%) Canada research 35,000 35,500 (500) (1.41%) Mexico brand advertising 143, , % Mexico co op/promotions 15,000 (15,000) 0.00% Mexico technology 325 (325) 0.00% Mexico communications 1,088 30,248 (29,160) (96.40%) Mexico travel trade 35,661 54,307 (18,646) (34.33%) Mexico research 25,000 (25,000) 0.00% Mexico admin and overhead 100, ,000 (26,000) (20.63%) Mexico publications/fulfillment 7,152 7,518 (366) (4.87%) So. Korea co op/promotions 63,753 63, % So. Korea technology 130,596 86,886 43, % So. Korea communications 96,105 27,005 69, % So. Korea travel trade 38, ,693 (72,809) (65.19%) So. Korea admin and overhead 153, ,664 (51,166) (25.00%) So. Korea publications/fulfillment 2,024 2,480 (456) (18.39%) See accountant s compilation report 11

20 SCHEDULE 3 COMPARATIVE SCHEDULE OF MARKETING AND PROGRAM EXPENSES (CONTINUED) For the Eight For the Eight Months Ended Months Ended 2/29/12 2/28/11 Variance % Diff China technology 9,849 6,636 3, % China communications 24,664 32,189 (7,525) (23.38%) China travel trade 119,272 93,781 25, % China admin and overhead 156, ,250 25, % China publications/fulfillment 7,008 3,379 3, % S/E co op/promotions 520 6,692 (6,172) (92.23%) S/E technology 46,437 67,222 (20,785) (30.92%) S/E communications 24,461 36,686 (12,225) (33.32%) S/E travel trade 91, ,905 (66,336) (42.01%) S/E research 16,000 16, % S/E admin and overhead 179, ,639 (1,054) (0.58%) S/E publications/fulfillment 3,280 3, % Travel trade development 115,941 41,192 74, % Int'l publications/fulfillment 11,083 7,681 3, % International web site maintenance 3,938 3, % Travel trade on line portal 68,065 49,326 18, % Global research reports 93,962 62,570 31, % Global project extension 632, , , % International marketing development 2,666 24,027 (21,361) (88.90%) International photography 27,545 27, % POW WOW fams/promotions 3,825 13,474 (9,649) (71.61%) POW WOW booth/banners/creative 66,602 42,284 24, % POW WOW sponsorship 300, , % Travel trade tools 1,083 2,775 (1,692) (60.97%) POW WOW creative/deliverables 8,603 8, % Depreciation expense marketing 11,371 11, % Depreciation expense infrastructure 19,654 19, % Total marketing and program expenses $ 31,845,873 $ 32,714,350 $ (868,477) (2.65%) See accountant s compilation report 12

21 SCHEDULE 4 SCHEDULE OF MARKETING AND PROGRAM EXPENSES BUDGET AND ACTUAL FOR THE EIGHT MONTHS ENDED FEBRUARY 29, 2012 Annual Budget Actual Balance % Used Advertising $ 25,893,000 $ 17,537,075 $ 8,355, % Website production 857,000 97, , % Domestic advertising co op 167,813 15, , % Rural marketing co op 290, , , % Tour of California 350, , % Fulfillment contractor 225,000 58, , % Fulfillment postage 350, , , % Depreciation expense website development 89,131 (89,131) 0.00% Official state map 225, , % Public affairs 140,000 93,352 46, % Digital assets 300, , , % Domestic press events 192, ,177 41, % Field representatives 420, , , % Industry events 356, , , % Promotional items 125,630 77,283 48, % Referendum campaign 140, , % Tourism development 70,000 32,911 37, % Industry site development and maintenance 35,000 35, % Industry/media newsletters 165,000 90,106 74, % Industry outreach 190, ,895 62, % Media FAMS/visits 75,000 19,555 55, % Newsclipping service 20,000 13,286 6, % PR agency and consultants 400, , , % PR promotions 216, , , % Press kits 59,000 26,396 32, % Domestic trade shows/promos 33,750 49,104 (15,354) % Fam tours 30,000 9,234 20, % Bulletins and special studies 120,000 70,554 49, % Domestic market research 150,000 52,123 97, % Economic impact analysis 130,000 38,000 92, % Marketing effectiveness & ROI 100,000 7,000 93, % Welcome centers 56,750 32,933 23, % UK brand advertising 4,543,000 4,396, , % UK co op/promotions 400,000 7, , % UK technology 140,000 67,988 72, % UK communications 182,000 77, , % UK travel trade 560, , , % UK research 100,000 20,348 79, % UK admin and overhead 685, , , % UK publications/fulfillment 100,000 26,982 73, % Japan co op/promotions 100, , % Japan technology 587, , , % Japan communications 140,000 15, , % Japan travel trade 134,500 18, , % Japan research 40,000 40, % Japan admin and overhead 485, , , % Japan publications/fulfillment 10, , % See accountant s compilation report 13

22 SCHEDULE 4 SCHEDULE OF MARKETING AND PROGRAM EXPENSES BUDGET AND ACTUAL (CONTINUED) FOR THE EIGHT MONTHS ENDED FEBRUARY 29, 2012 Annual Budget Actual Balance % Used S/E co op/promotions 126, , % S/E technology 77,600 46,437 31, % S/E communications 70,900 24,461 46, % S/E travel trade 190,026 91,569 98, % S/E research 16,000 16, % S/E admin and overhead 333, , , % S/E publications/fulfillment 38,000 3,280 34, % Germany co op/promotions 285,000 85, , % Germany technology 145,000 83,206 61, % Germany communications 110,000 39,272 70, % Germany travel trade 229,446 88, , % Germany admin and overhead 380, , , % Germany publications/fulfillment 30,000 (7,044) 37,044 (23.48%) Australia/NZ brand advertising 1,700, , , % Australia/NZ co op promotions 345, , , % Australia/NZ technology 12,000 11, % Australia/NZ communications 157,000 54, , % Australia/NZ travel trade 367, , , % Australia/NZ research 35,000 28,149 6, % Australia admin and overhead 450, , , % Australia/NZ publications/fulfillment 25,000 1,946 23, % Canada brand advertising 2,335,000 1,198,131 1,136, % Canada co op/promotions 150,000 (150,000) 0.00% Canada technology 40, , % Canada communications 150,000 (92,696) 242,696 (61.80%) Canada travel trade 688 (688) 0.00% Canada research 35,000 (35,000) 0.00% Mexico brand advertising 225, ,981 81, % Mexico co op/promotions 120, , % Mexico technology 75,000 75, % Mexico communications 95,000 1,088 93, % Mexico travel trade 123,350 35,661 87, % Mexico admin and overhead 240, , , % Mexico publications/fulfillment 20,000 7,152 12, % So. Korea co op/promotions 40,000 63,753 (23,753) % So. Korea technology 143, ,596 12, % So. Korea communications 70,000 96,105 (26,105) % So. Korea travel trade 190,000 38, , % So. Korea admin and overhead 307, , , % So. Korea publications/fulfillment 50,000 2,024 47, % China technology 95,000 9,849 85, % China communications 44,700 24,664 20, % China travel trade 202, ,272 83, % China admin and overhead 312, , , % China publications/fulfillment 44,700 7,008 37, % See accountant s compilation report 14

23 SCHEDULE 4 SCHEDULE OF MARKETING AND PROGRAM EXPENSES BUDGET AND ACTUAL (CONTINUED) FOR THE EIGHT MONTHS ENDED FEBRUARY 29, 2012 Annual Budget Actual Balance % Used Travel trade development 240, , , % Int'l publications/fulfillment 50,000 11,083 38, % Int'l web site maintenance 50,000 3,938 46, % Online training maintenance 30,000 30, % Travel trade online portal 100,000 68,065 31, % Global research reports 145,000 93,962 51, % Global project extension 2,200, ,333 1,567, % International marketing development 35,000 2,666 32, % International photography 40,000 27,545 12, % POW WOW fams/promotions 90,434 3,825 86, % POW WOW booth/banners/creative 200,000 66, , % POW WOW creative/deliverables 100,000 8,603 91, % POW WOW sponsorship 300, , % Travel trade tools 50,000 1,083 48, % Depreciation expense marketing 11,371 (11,371) 0.00% Depreciation expense infrastructure 19,654 (19,654) 0.00% Total marketing and program expenses $ 53,765,422 $ 31,845,873 $ 21,919, % See accountant s compilation report 15