Berklee College of Music and The Boston Conservatory

MASSDevelopment 2019 Current Topics in Tax‐Exempt Finance November 15, 2019

CONFIDENTIAL –Not for Redistribution Pre‐Merger Facts and Figures for 2015/2016 Berklee College of Music and The Boston Conservatory

THE BOSTON BERKLEE CONSERVATORY STUDENTS/ PROGRAMS Undergrad Undergrad College Conservatory Program Program CONSERVATORY $59,398 $61,042 Dance Undergraduate 4,510 563 Theater Students Non‐Union Union Faculty Female 33% 63% Faculty

Music (Classical) Male 67% 37% Music (Contemporary) Graduate 680 Staff 103 Staff 160 235 Students 692 Faculty 204 Faculty

COLLEGE Online Students 2,553 NA Performance Film Scoring 18 Boston’s Back Boston’s Music Production/Engineering Programs Bay, Fenway Summer Programs NM Music Business 2,798 Berklee Online Music Therapy Students & Education Valencia, Spain International Etc. 33% 10% Students

CONFIDENTIAL –Not for Redistribution Pre‐Merger Finances Berklee College of Music and The Boston Conservatory

BERKLEE May 31, 2016 THE BOSTON MAY 31, 2016 CONSERVATORY Total Assets $620M Total Assets $69M Total Liabilities $375M Total Liabilities $30M Total Net Assets $245M Total Net Assets $39M Revenue $234M Revenue $29M Operating Margin 3.5% Operating Margin 1.8% Endowment $272M Endowment $8M Property, Plant, Equip $229M Property, Plant, Equip $49M

CONFIDENTIAL –Not for Redistribution Evolution of the Merger Berklee College of Music and The Boston Conservatory

 Adjacent Campuses  Long history of collaboration: . Joint symposia – Music/Ballet . Student cross registration opportunities through Pro Arts Consortium . Joint faculty appointments  Expansion to Shared Services in 2014: . Dining Services, Public Safety, and Facilities/Custodial  Complementary programs and facilities: . Conservatory – nationally recognized programs in Dance, Theater . Berklee –global recognition in contemporary music and related programs  Together, opportunity to elevate to global leadership in performing arts, with multiple benefits for students

CONFIDENTIAL –Not for Redistribution Key Benefits of a Full Merger Berklee College of Music and The Boston Conservatory

 Strategic convergence of audio and visual: . Small, but nationally recognized programs in Dance and Theater . Globally recognized programs in music  Enhanced opportunities for students . Complementary programs provide expanded educational and career opportunities  Complementary, adjacent facilities . Berklee large performance center; Conservatory mid‐sized performance venue . Berklee state‐of‐the‐art recording studios and sound stages  Leverage global distribution platform, including online  Complementary world‐class faculty  Expanded donor base  Economies of Scale

CONFIDENTIAL –Not for Redistribution Merger Process Berklee College of Music and The Boston Conservatory

 Due diligence – preliminary  Memorandum of Understanding  Due diligence –final . Joint committees (Academic; Student; Operations; Culture; Executive)  Definitive Agreement  Closing  Post‐Merger Integration and Governance . Integration committee structure follows due diligence structure . Regular reporting –“Report Card” - Strategic Plan, Pro Forma, Personnel, Systems and processes

CONFIDENTIAL –Not for Redistribution Getting to a Shared Vision Berklee College of Music and The Boston Conservatory

 Individual institutional missions and strategies  Opportunity assessment: . Academic (faculty, programs, facilities, delivery methods, recruitment) . Finance/Economics (financial strength, capacity utilization, synergies)  Development of shared mission and strategy . Target audience . Competitive positioning . Brand strength and importance . Critical stakeholders: students; board; faculty; administration  Development of Strategic Plan and Pro Forma Financial Statements

CONFIDENTIAL –Not for Redistribution Berklee Today Berklee College of Music and The Boston Conservatory

 Berklee College of Music and Boston Conservatory at Berklee  6,400 undergrad students, over 500 grad students, over 1,000 online students . Conservatory applications up 50% over past 3 years  Merged Liberal Arts departments, libraries, bookstores, endowments, student affairs, enrollment, and other administrative areas; refinanced consolidated debt  Expanded programs . New dance, theater, and stage management programs; new Opera intensive in Spain . Summer program expansion in Dance and Theater  Hundreds of awards – Grammy, Latin Grammy, Oscar, Emmy, Tony  Facilities in Boston, Spain, and new facility in NYC, steps from Broadway . Renovation of core Conservatory facility/Construction of joint practice facility  Faculty integration complete  Solid, consistent financial performance: $300 million in revenues; 4.4% operating margin

CONFIDENTIAL –Not for Redistribution Lessons Learned Berklee College of Music and The Boston Conservatory

 Tackle big issues early, but look for early wins  Both parties must benefit –know your priorities  It’s a marathon, but establish deadlines  Lock in key people  Culture is critical …  And so is communication …  Don’t underestimate systems challenges  Celebrate successes  Get the right advisors

CONFIDENTIAL –Not for Redistribution