Internet2All Staff Meeting

November 29, 2001Financial Review

Some FAQs About Our Financials

Where does our funding come from or who pays the freight?What is our current financial position?How does the budget work?What’s the budget plan for 2002?What is the financial viability of Internet2 in these challenging times and will Internet2 be doing any layoffs?What can I do to help?

Who Pays the Freight?

Members Dues - RegularAffiliateCorporateTotal

Meeting Fees

Abilene Fees - ConnectionParticipationSEGPTotal

Grant Income

Interest / Investment Income

Total Revenues

* 000’s omitted

2001* 2002*$4,625 $4,725

580 6101,310 1,200

$6,515 $6,535

$153 $180

8,480 10,3053,597 4,090

147 865$12,224 $15,260

247 621

500 500

$19,639 $23,096

What is Our Current Financial Position?

AssetsTotal Current AssetsTotal Property and EquipmentTotal Other Assets

Total Assets

Liabilities and Net AssetsTotal Current LiabilitiesTotal Long-Term Liabilities

Total Liabilities

Net AssetsUnrestricted Net Assets

Total Liabilities and Net Assets

* 000’s omitted

Balance Sheet as of 10/31/01*

$23,355678162

$24,195

$6,5170

$6,517

$17,678

$24,195

Consolidated Budget

EQUALS

Core budget + Projects budget + Abilene budget

How Does the Budget Work?

How Does the Budget Work?

•Administration•Applications (General, Arts & Humanities & Health Sciences)

•Communications•Corporate

•Engineering•Federal• International•Membership•Middleware

Core budget made up of the following functions:

How Does the Budget Work?

Project budget made up of the following projects:

•Applications: Commons, Oxford/UKERNA, NEES

•End to End Performance•Expanded Access•Tech Transfer•Middleware: Directories, PKI, Shibboleth

Core and project budgets funded by member dues, meeting fees, grants, interest and investment income, overhead charge to Abilene and core reserves or net assetsAbilene budget made up of Backbone Infrastructure function and parts of time of othersAbilene funded by connection, participation, SEGP fees and Abilene reserves or net assets

How Does the Budget Work?

Budget FY'01 Consolidated

35%

6%

6%1%8%

21%

3%

20%

Proposed Budget FY'02 Consolidated

34%

4%

4%

1%9%

22%

6%

20%

Total Meeting

Total Personnel

Total Travel

Printing, publication, multi-media

Office Support

Abilene Network Total

Total Other

Total Capital Expenditures

Distribution of Expenses by Category

Distribution of Expenses by Area

AbileneAllocatedAdministrationApplicationsCommunications

CorporateEngineeringFederalInternational

MembershipMiddlewareApplications ProjectsEnd to End Performance

Expanded AccessTech TransferMiddleware ProjectsGrants

Proposed Budget FY’02 ConsolidatedBudget FY’01 Consolidated

What’s the Budget Plan for 2002?

Let’s look at net assets or reserves and how they play out in 2002

Consolidated* Core/Projects*

Balance 1/1/02

Revenue-Expenses

Balance 1/1/03

14,106

(6,665)

7,441

Abilene*

7,900

(3,100)

4,800

6,206

(3,565)

2,641

* 000's omitted

What is the Financial Viability of Internet2 in These Challenging Times and will Internet2 be Doing any Layoffs?

Solid financial footing todayNet loss of corporate members YTD 2001Increases in Abilene participation and

connectivityBreadth and depth of projects increasing

with commensurate increases in staff and related expenses

For the first time, in 2002 our net assets or reserves will be used to fund ongoing activities both in the core/project and Abilene areas . . . this was the plan

What is the Financial Viability of Internet2 in These Challenging Times and will Internet2 be Doing any Layoffs?

What Can You Do to Help?

Grow and create new funding• Identify and help sign up new members•Help us think through the value and pricing of our memberships

•Encourage corporate members to move up to sponsorship and partnership levels

•Help us rationalize the right fees for meeting attendance

•Stay alert to and pursue grant funding sources•Think about fee for service opportunities – help develop business plans to get them going

What Can You Do to Help?

Control expenses•Be flexible and help out across the organization

•Plan early and thoughtfully for trips – can one or two represent us instead of three of four?

•Speak up about cost saving ideas•Treat Internet2’s resources as if they were your own

Internet2All Staff Meeting

November 29, 2001Operations Update

Prioritized Activities

Leadership / communicationHuman resources

• Hire the best

• Benefits administration for 2002 updated

• Launch administrative support team

• Enhance performance and salary review processes

• Review holiday policy

• Rationalize titles

• Update description of roles and responsibilities for all staff

• Promulgate CSFs to all staff

Prioritized Activities (cont.)

Information Technology•Provide outstanding support and service•Complete projects on schedule•Provide technical support to iMIS member database project

•Support other technical requirements across the organization

Prioritized Activities (cont.)

Financial management•Board approval of 2002 budget•Prepare for 2001 audit•Clean up accounts receivable• Implement new billing and collection processes•Administer grants effectively

Prioritized Activities (cont.)

Refine working group guidelines and administrationDevelop and execute revenue generation plansUpdate travel guidelinesRefine software and distribution and support guidelines

Challenges / Opportunities

Fill approved open positions ASAPProvide assistance in all functional areasContinue to assimilate new staff wellMaximize communication / information flowBalance process improvement with empowerment / flexibility / nimblenessVery prudently manage resourcesMaximize support for staff and members

How Can You Play a Role in Operations?

Communicate•Tell us what you need•Don’t fret•No surprises•Share ideas on how to do things better and/or preserve resources

How Can You Play a Role in Operations?

Help new folks get off to a good startBe prudentBe patientBe positiveParticipate when asked or proactively volunteer