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-11-

[[underlined]] Income [[/underlined]] | [[underlined]] Projection Compared to Orig. Budget [[/underlined]]

°Magazine - Advertising income has remained higher than budget and subscription revenues have also been strong.  Production and postal costs will be held substantially below original budget. | +$1,650,000  

°National Associates - Donations from Contributing Associates are projected to exceed budgeted levels and expenses have been tightly controlled | +258,000

°Concessions/Parking/Food Services - Continued low museum visitation (including elimination of summer hours) and higher expenses related to personnel and equipment repair and replacement have contributed to a further decline in projected net income. | -296,000

°SI Press and Exposition Books - Projected in May to fall below budget, actual gross sales for [[underline]] The Smithsonian Book of Comic-Book Comics [[/underline]] are now expected to exceed earlier test estimates by $400,000. | +165,000

°Division of Performing Arts - Problems identified in May, namely, unanticipated costs of promotion (primarily postage), record production (underbudgeted royalties to performers) and other program expenses, combined with an unexpectedly high rate of bad debts, have increased in recent months, and a deficit of $1,100,000, compared to a budgeted gain of $100,00, is now projected for the year.  A review is being conducted of this activity to tighten controls and prevent recurrence of such extreme variances in the future. | -1,200,000

°All Other Auxiliary Activities - Increased expenses in the Traveling Exhibition Program and lower bookings at the Belmont Conference Center in anticipation of the pending sale will produce a budget variance of | [[underline]] -155,000 [[/underline]]
       
Net Change in Income | +$422,000

[[underlined]] Expenses and Transfers [[/underlined]]

°Net administrative and program expenses remain at approximately the same levels reported in May with a major portion of increase due to Quadrangle fund raising costs and the impact of the Executive Level pay raise. | -$445,000

°Increased revenue from NASM Theatre will be offset in part by revenue-sharing transfers to bureaus and other miscellanous transfers.  | [[underline]] +70,000 [[/underline]]

Net change in expenses and transfers | -$375,000

Net change to Unrestricted General Trust Funds | [[double underlined]] +$47,000 [[/double underlined]]