C.A.R. 2012-2014 Strategic Planning

Presented by Joel Singer

September 2011

C.A.R.

CREPAC IMPAC CREPACFederal

ScholarshipFoundation

Organizational Chart

CREIEC

REBS

C.A.R.

CREPAC IMPAC CREPACFederal

ScholarshipFoundation

Organizational Chart

CREIEC

REBS

C.A.R.

CREPAC IMPAC CREPACFederal

ScholarshipFoundation

HousingAffordability

Fund

EducationFoundation

REBT, Inc100%

zipLogix, LLC64.4%

RERS, LLC100%

calMLS(calREED)

Current Organizational Chart

2012 Budget Analysis

RevenueExpendituresMembership

Revenue Expenses Net Membership

2011 Projection 25,908,100 25,879,500 28,600 162,000

2012* (note) 25,545,000 26,700,000 (1,155,000) 154,000

2012 Proposed 27,320,800 26,798,200 522,600 154,000

Budget Review

Note: Forecast based on 2011 projection with inflation adjustment before budget review

'96 '06 '10 '11 P 12 B0

10,000

20,000

30,000

40,000

50,000

60,000

RERS,LLC

zipLogix

REBT, Inc

REBS

C.A.R.

$ Millions

14

49

4036

C.A.R. & SubsidiariesCombined Revenue

37

25.9 26.824.7 24.1 24.8 25.8 26.727.3

25.927.427.1

28.9

33.833.9

0

5

10

15

20

25

30

35

40

2006 2007 2008 2009 2010 2011 2012

Revenues Expenditures$ Millions

Revenue vs. Expenditures ( Excluding Subsidiaries)

2011 Projected Expenditures

Legal21%

Commu-nication/

Marketing19%Governance

14%Zipform

13%

Member Info12%

Gov't Af -fairs9%

Operations7%

Digital Ink2%

ZipVault2%

others1%

2012 C.A.R. Sources of Revenue

Dues47%

REALTOR® Action Assessment16%

Admin Fee7%

Intercompany Transfer

5%

Investment Income

4%

PAF4%

IAF4%

Communication3% EXPO

3%

Others3%

New Member/Late Fee

2% CRE Magazine2%

2012: Where Your Dues Dollar Is Invested

Legal23%

Communi-cation18%Governance

15%

Member In-formation

13%

zipForm®13%

Governmental Affairs

9%

Operation6% Digital Ink

2%Others

1%

10 2012 10 2011RANK Program Description Budget RANK Projection

1 Member Legal Services 2,952,700$ 2 2,554,800$ 2 ZipForm® 2,696,100 1 2,842,200 3 Realtor® Advertising 2,026,700 3 2,025,900 4 Governmental Relations 1,823,700 4 1,856,300 5 Board of Directors 1,265,500 6 1,325,000 6 Corporate Legal Services 1,259,000 5 1,468,800 7 Research and Economics 954,100 7 905,800 8 Communications 657,800 9 659,400 9 Internet Development 617,300 8 884,700

10 Membership Development 588,000 10 658,900

10 Largest Program Expenditures in 2012 & 2011

Number of Budgeted Staff Positions

118

121120

121

124.5

128.5

118

112

114

116

118

120

122

124

126

128

130

2006 2007 2008 2009 2010 2011 2012

Number of Staff

Member-to-Staff Ratio

1,1001,198

1,663

1,406

1,301

0

200

400

600

800

1000

1200

1400

1600

1800

'00 '05 '10 '11 P 12 B

90,500

154,000162,000

211,254

146,025

102,655

148,346

58,749

-

40,000

80,000

120,000

160,000

200,000

240,000

1971 1980 1983 1990 1997 2006 2011 P 2012 FCycle 1: 1980 148,346 (peak) to 1983 102,655 (trough). -30.8%Cycle 2: 1990 146,025 (peak) to 1997 90,500 (trough). -38.0%Cycle 3: 2006 211,254 (peak) to

9 Ye

ars

3 years

7 years7 years

9 ye

ars

6 years

Membership Comparison

10 10 10

4939

115115115

9089

1010 1010 10 10 10

0

20

40

60

80

100

120

140

2000 2001 2002 2011 2012 B

Dues IAF PAF RAA

Membership Dues Per Member

Membership dues was reduced in 1995 from $77 to $64. IAF $10 was implemented in the same year.

3738

46

24

1418

3557%

44%

49% 48%44%

34%

42%

5

10

15

20

25

30

35

40

45

50

55

1990 1995 2000 2005 2010 2011 P 2012 B20%

30%

40%

50%

60%

70%

80%Total Revenue ($ millions)Dues as % of Total Revenues

Revenue Percentage

Dues Revenue as Share of C.A.R. & Subsidiaries Total Revenue

Member Benefit Provided in Terms of $ Amount

2012 Program Cost $24,512,000

Dollars spend per member in 2012 is $159

Compared to the $115 membership dues paid to support 2012 Programs.

REALTOR® Advertising

Media:• Radio• Television• Online Advertising• Video• Social Media

Core Program Cost $2,026,700

California Real Estate MagazineRevenue

2359

501 576469

0

500

1000

1500

2000

2500

2006 2010 2011 2012

Revenue

$ Thousand

149

511565

383

0

100

200

300

400

500

600

2006 2010 2011 2012

Revenue

Online AdvertisingRevenue

$ Thousand

New Member Services Added Last 10 yearsZipForms ® Digital InkZipVaultForms Advisor/TutorStatewide OmbudsmanYoung Professionals Network AORN TouchMember Mobilization Smart

Phone ApplicationC.A.R. Online Redesign

Consumer Advertising CampaigncalMLSREALTOR® Showcase Customer Contact CenterField Program Housing AffordabilityePubsLegal Hotline ExpansionStrategic DefenseCommunication Video Content

Liquid Reserves

5.21

40.3 40 41.1

5.57

4.4 4.7

20.1 19 18.9

05

1015202530354045

1990 2000 2010 2011 P 2012 B

Reserves ($ Millions) Months of Reserves

REBS.Revenue $3.9million

Net Surplus $244,300

REBT, Inc.Revenue $344,000

Net Surplus $297,000Before Transfer

zipLogix (64.4%)Revenue: $6.1 million

Net Surplus $1.4 million

RERS, LLC Revenue $37,000 Net Loss ($32,100) Before Transfer

2011 Projection for Profit Entities

Combined Revenue

0

2

4

6

8

10

12

1996 2000 2010 2011 P

RERS (100%)

zipLogix64.4%

REBT, Inc

REBS

REBS & Subsidiaries

$ Millions

REBS & Subsidiaries Combined Net Income

-2

-1

-1

0

1

1

2

2

3

3

4

4REMTRERS (100%)REBOSzipLogix 64.4%REBTREBS

20001996

$ Thousands

2010 2011 P

1

1.51.8

2

3.5 3.5

2 2

1

1.7

0

1

2

3

4

1996 2000 2005 2006 2007 2008 2009 2010 2011P

2012B

REBS Transfer to C.A.R.($ Millions)

REBS, Inc. 1.4$ REBT, Inc. 0.8$ zipLogix (64.4%) 4.6$ Total 6.8$

Million

REBS Inc. and SubsidiariesProjected Cash Balance – December 31, 2011

CREPAC

IMPAC CREIEC

CREPAC Federal

Political Action Committees

Membership Dues$184

$115 (62.5%)

Support Programs

$69 (37.5%)

Support Political Activities

Membership Dues and Assessments

Political Assessment included in Membership Dues

In 1995 Issues Action Fund (IAF) $10In 2000 Political Action Fund ( PAF) $10In 2011 REALTOR® Action Assessment (RAA) $492012 Proposed REALTOR® Action Assessment $39

C.A.R. MemberDues $184

C.A.R. Dues$115

PAFPolitical Activities Fund

$10

IMPAC-Local

Matching10% ofRAFVoluntary

Contribution

IMPAC- StateMatching 5% ofRAF VoluntaryContribution

Balance-PAF

Funds support

All Admin CostsFor IMPAC/CREPAC

& LCRC

Remaining Balance

Allocate 70% toState IMPAC

Allocate 30% toLocal IMPAC

RAA$49

Allocation

CREPAC45%

LCRC30%

CREIEC25%

C.A.R. Membership Dues

IAFIssues Action Fund

$10

REALTOR® Action Fund(RAF) contribution

Amount $50 to $5,000

Housing Affordability Fund(HAF)

VoluntaryAmount up to $10

RAF contribution$50 to $98

Voluntary Allocation

CREPAC45%

$50 to $98

LCRC30%

$50tof $98

CREIEC25%

$50 to $98

RAF contribution$99 to $5,000

To CREPAC Federal

RAF contribution with the corporate check

$99 to $5,000 allocated to CREIEC

VoluntaryContribution

Voluntary Contribution

Program funded byRAA

Current Dues, Assessments and Voluntary Contribution

RAA ($49)$7,530,000

CREPAC State$3,098,250

CREIEC$1,721,250

Communications Membership

Value Campaign Material$20,000

Federal Govt. Relations

Officer’s Lobbying Trip

$25,100

Political Affairs Fundraising$317,900

Member Mob.Phone App.

$60,000

Program Costs$645,000

2011 REALTOR® ACTION Assessment Allocation

LCRC$1,136,025

IMPAC Local$929,475

PAF Field Program (KC, LL)

$222,000

33

*70% of RAA after program costs *30% of RAA after program costs

Projected as of December 31, 2011

RAA ($39)$5,698,000

CREPAC State$1,940,979

CREIEC$1,078,322

RAF Receptions $175,000

Fed Gov’t Relations (Officer’s

Lobbying Trip) $25,100

Campaign School

$50,000

RAF Fundraising/RPC

$663,500

Program Costs$1,384,713

2012 REALTOR® ACTION Assessment Allocation

LCRC$711,692

IMPAC Local$582,294

PAF Field Program

$4,313

34

*70% of RAA after program costs *30% of RAA after program costs

C.A.R. Electoral Services$39,700

Member Mob Phone App

$35,000

CommunicationsMembership

Value Campaign materials$20,000

CREPAC Local Candidate Field

Program$372,100

Based on 2012 Proposed Budget

RAA ($39)$5,698,000

CREPAC State$1,185,619

CREIEC$658,677

RAF Fundraising$743,500

Fed Gov’t Relations $211,400

CREPAC$252,700

Campaign School

$50,000

Program Costs$3,063,291

2012 REALTOR® ACTION Assessment Allocation

LCRC$434,727

IMPAC Local$355,686

IMPAC$133,800

35

*70% of RAA after program costs *30% of RAA after program costs

RAF Receptions$175,000

CREPAC Local Candidate Field

Program$372,100

Member Mob Phone App

$35,000

C.A.R. Electoral Services$39,700

CommunicationsMembership

Value Campaign materials$20,000

PAF Field Program $124,241

Gov’t Relations $905,850

Based on Task Force Recommendations

BASED ON TASK FORCE RECOMMENDATIONS

Program Total C.A.R. General Fund (%) C.A.R. General Fund ($) NAR (%) NAR ($) PAF (%) PAF ($) IAF (%) IAF ($) RAA (%) RAA ($)

Government Relations 4100 $1,811,700 50% 905,850 50% 905,850

Federal Govt. Relations 4110 $422,800 50% 211,400 50% 211,400

CREPAC 4700 $505,400 50% 252,700 50% 252,700

Campaign School 4701*** $50,000 100% 50,000

IMPAC 4800 $267,600 50% 133,800 50% 133,800

LGR/Legislative Committee 4140 $172,500 54% 83,106 18,600 13% 20,007 33% 50,787

RAF Fundraising 4121 $760,300 16,800 100% 743,500

PAF: Member Mob 4120 $406,400 100% 406,400

PAF: Field Program 4122 $653,900 81% 529,659 19% 124,241

PAF: Member Ed 9102 $505,000 100% 505,000

RAF Receptions 9104 $175,000 100% 175,000

PAF Overhead 9100 $7,000 100% 7,000

CREPAC Field Program $372,100 100% 372,100

C.A.R. Electoral Services $39,700 100% 39,700

Member Mob. Enhancement (4120A) $54,800 100% 54,800

Member Mob. Mobile Phone App (8260) $38,700 10% 3,700 90% 35,000

Communications, MVP (6000) $20,000 100% 20,000

$6,262,900 $1,204,056 $1,522,866 $437,287 $3,063,291 6,227,500

BASED ON 2012 PROPOSED BUDGET

Program Total C.A.R. General Fund (%)

C.A.R. General Fund ($) NAR (%) NAR ($) PAF (%) PAF ($) IAF (%) IAF ($) RAA (%) RAA ($)

Government Relations 4100 $1,811,700 100% 1,811,700

Federal Govt. Relations 4110 $422,800 94% 397,700 6% 25,100

CREPAC 4700 $505,400 100% 505,400

Campaign School 4701*** $50,000 100% 50,000

IMPAC 4800 $267,600 100% 267,600

LGR/Legislative Committee 4140 $172,500 88% 151,500 3% 6,000 9% 15,000

RAF Fundraising 4121 $760,300 2% 16,800 11% 80,000 87% 663,500

PAF: Member Mob 4120 $406,400 100% 406,400

PAF: Field Program 4122 $653,900 99% 649,587 1% 4,313

PAF: Member Ed 9102 $505,000 100% 505,000

RAF Receptions 9104 $175,000 100% 175,000

PAF Overhead 9100 $7,000 100% 7,000

CREPAC Local Candidate Field Program $372,100 100% 372,100

C.A.R. Electoral Services $39,700 100% 39,700

Member Mob. Enhancement (4120A) $54,800 100% 54,800

Member Mob. Mobile Phone App (8260) $38,700 10% 3,700 90% 35,000

Communications, MVP (6000) $20,000 100% 20,000

$6,262,900 $2,364,600 1,717,787 773,000 1,384,713 6,240,100

REALTOR® Action Assessment2011 - $49/2012 - $49 2011- $49/2012- $39

RAA Revenue 2011 $7,472,500 $7,472,500RAA Revenue 2012 $7,105,000 $5,698,000

Total revenue $14,577,500 $13,170,500

RAF - 2011 State (LCRC & Federal not included) $550,000 $550,000RAF - 2012 State (LCRC & Federal not included) $650,000 $650,000NAR ( State Allocation) $364,210 $364,210

Administrative Cost 2011 -$645,000 -$645,000Administrative Cost 2012 -$1,400,000 -$1,400,000Less Local allocation 30% -$3,759,750 -$3,337,650Global Expenditure Plan -$8,820,000 -$8,820,000Excess $1,516,960 $532,060

Membership 154,000 154,000 Excess per Member $9.85 $3.45

Governors Reserve IE 1,000,000 Primary Incumbents & Candidates 780,000 General Incumbents & Candidates 780,000 Senate/Assembly Leadership 400,000 Coaltions & Causes 400,000

California Democratic Party (CDP) 250,000 California Republican Party (CRP) 250,000 Independent Expenditures 560,000 IE Campaigns 4,000,000 Polling (250,000) & Research ($150,000) 400,000 Total Expenses 8,820,000$

Global Expenditure Plan 2011-2012

Year 05-06 07-08 09-10

CREPAC 3,490,093$ 2,675,225 1,931,824 CREIEC $ 1,628,064 955,911 2,861,436

TOTAL 5,118,157$ 3,631,136 4,793,260

State PAC’s Expenditures In A Two Year Cycle

RANK Contributor PAC Total Contributions1 Pechenga Band of Luiseno Mission Indians 43,360,697 2 Morongo Band of Mission Indians 38,453,597$ 3 Tribes for Fair Play No on 94 95 96 & 97 24,754,413 4 California Teachers Association 22,621,067 5 Agua Caliente Band of Cahuilia Indians 21,650,925 6 Clean Energy Fuels Corp 18,811,350 7 PG&E Corp 16,229,562 8 Edison Internation 14,583,992 9 Service Employees International Union 13,408,998

10 Pala Band of Mission Indians 13,178,219 33 California Association of REALTORS® 2,562,300

Top 10 PAC Contributors 2007-2008 Election Cycle

FUNDS 2012 F 2011 P 2010 Actual

RAF 1,750,000 1,350,000 2,874,914 RAA 5,698,000 7,530,000 -

IAF 1,461,300 1,530,000 1,621,247

PAF 1,461,300 1,530,000 1,621,247 TOTAL 10,370,600 11,940,000 6,117,408

Political Fundraising

Political Fundraising

0

2

4

6

8

10

12

14

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 YTD

RAAIAFPAFRAF4.9 5.1

6.5

$ Millions

7.89.3

8.56.8 6.0 6.1

11.5

Political Action Committee- Fund Balance As of July 31, 2011

CREPAC 4.9$ IMPAC 8.5$ CREPAC/Federal 0.7$ CREIEC 1.8$ Total 15.9$

Millions

FOUNDATIONS

ScholarshipEndowment$1.2 million

EducationEndowment

$89,500

Housing Affordability Funds Funds Available $2.7 million

FoundationsAs of July 31, 2011

$3.9 million

1.8

2.62.4

0.0

0.3

0.6

0.9

1.2

1.5

1.8

2.1

2.4

2.7

C.A.R. Contribution Direct Contribution Contribution through Dues

$ Millions

Housing Affordability FundSince Inception, as of July 31, 2011

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 P -

300,000.0

600,000.0

900,000.0

1,200,000.0 NAR Contribution

C.A.R. Contribution

Contribution Direct

Contribution-Dues

$ Millions

156

500

500

500500

500

420

240208317286

300

415

189

189209265305280

216

178

Housing Affordability Fund

117

194

SPF recommendations on the 2012 C.A.R. Budget and Augmentations tobe presented by Don Faught, Treasurer

Questions?