Sesame Workshop 2008 Annual Report If children experience the joy of learning, it’s more likely they’ll be lifelong learners.

If they learn healthy habits, it’s more likely they’ll grow up healthy and strong.

If they gain a sense of themselves and an appreciation of others, it’s more likely they’ll engage others with respect and understanding.

It’s that simple and that complicated.

Sesame Workshop is using the power of media – and the power of Muppets – to increase the odds that all children reach their highest potential, and in so doing, make a better world for us all. Disadvantaged children in the United States learn 15,000 fewer words by the time they reach first grade than their more advantaged peers.1

In the United States alone, provides the building blocks of literacy for an estimated 12 million children each week.2

1) L. Moats, Overcoming the Language Gap. American Educator, September 5-9, 2001. 2) Sesame Workshop, The Media Utilization Study, 2007. Sesame Workshop, Sesame Street Brand Tracking, 2008. Sesame Workshop is increasing the odds that children are ready to read and write, and, as a result, are ready for success in school and life.

More than 60 percent of families with Making Reading Cool incomes of $25,000 or less report their children age 5 or younger view In January 2009, Sesame Sesame Street at least once a week.1 Workshop launched The Electric Company, a fresh take on the 1970s series of the same name. The all-new Closing the series, on television, online, and through community Word Gap outreach, brings literacy to life for struggling readers Sesame Street’s thirty- ages 6 to 9, especially those ninth season focuses from low-income families. on building vocabulary Hip-Hop performers and because children celebrities such as Tiki who know more words Barber, Wyclef Jean, and others join the cast in live- at an early age are more action and animated sketches, likely to become compe- music videos and mixed- tent readers and successful learners. “What’s the Word media pieces to help children on the Street?” is a new Sesame Street initiative that make the all-important puts into action the idea that exposure to a word in shift from “learning to read” multiple contexts helps it become part to “reading to learn.” of a child’s vocabulary. Celebrities such as Jack Black help understand the word “octagon,” and the new Muppet, Murray, conducts on-the- street interviews for the word of the day. It’s all part of a literacy curriculum that takes aim at closing the word gap – the disparity in word acquisition between children in poor families and those in professional ones – that directly impacts success in school and beyond.

Children who watch Sesame Street are more likely to show signs of emerging literacy and numeracy than are nonviewers.2

1) Sesame Workshop, The Media Utilization Study, 2007. 2) J. C. Wright, A. C. Huston, R. M. Scantlin, and J. A. Kotler, “The Early Window Project: Sesame Street Prepares Children for School,” in S. Fisch and R. Truglio, eds., G is for Growing: Thirty Years of Research on Sesame Street. (Mahwah, N.J.: Erlbaum, 2001), pp. 97–114. One out of six children in the world lives in . Four in five Indian preschoolers have no access to early childhood care or education.1

Sesame Street in India gives a head start in life to more than 17 million children ages 3 to 6, many of whom are among the most marginalized in the world.

1) UNESCO, Early Childhood Care and Education in E-9 Countries: Status and Outlook, Section for Early Childhood and Inclusive Education, Division of Basic Education, Education Sector. Prepared for The Fifth E-9 Ministerial Meeting, Cairo, Egypt, 2008. Sesame Street bridges divides in India, increasing the odds that all children have access to preschool education and the enduring benefits early learning brings.

Children with greater exposure to on television show greater improvement in literacy and math relative to those with less or no exposure. This impact is particularly pronounced among the youngest children and those from economically disadvantaged backgrounds.1

One in Six Taking it to the Streets Central to Galli Galli Sim Sim is an extensive outreach Lives in India program to serve under- the potential for positive resourced and low-literacy change is enormous populations. Run by the nonprofit subsidiary Sesame In addition to helping children develop literacy and Workshop India, Galli Galli math skills, India’s local version of Sesame Street, Sim Sim is literally taking Galli Galli Sim Sim, pays special attention to the series to the streets, building bridges between children, outfitting vegetable carts bridges that span geography, with TVs and DVD players to reach children without access religion, social standing, to preschool education in language, gender, and urban slums and remote ability. This is particularly rural areas. Galli Galli Sim important in a nation as Sim is also being used in complex and diverse as India. 347 “balwaadis” (preschool child-care centers) to help The challenges are great, but even the most marginalized the numbers alone – one out of children learn. six children in the world lives in

India – make the potential for Galli Galli Sim Sim is positive change enormous. present in child-care centers where 95 percent of children are from lower socioeconomic strata and have limited Mobile community screenings of Galli Galli Sim Sim access to educational reach one out of three caregivers and two out of 3 2 of o u t 3 materials at home. children three preschool children in targeted slums. 2

1) GFK Mode, Galli Galli Sim Sim Mobile Viewing Reach Report, Waves 1 and 2, unpublished manuscript, internal research report submitted to Sesame Workshop India, 2007. 2) PrismWorld, Galli Galli Sim Sim Longitudinal Educational Impact Survey, Wave 1 Report, unpublished manuscript submitted to Sesame Workshop India, 2008. 3) GyanVriksh Technologies, Midline Report of the Naturalistic Study on Educational Impact of Galli Galli Sim Sim, submitted to Sesame Workshop, 2008. Almost 800,000 children under age 5 in the United States have a parent or parents on active military duty or in the National Guard and Reserves.1

Sesame Street reaches virtually every military family with young children through a special initiative that helps them cope with the complex challenges of separation and change.

1) Office of the Deputy Under Secretary of Defense (Military Community and Family Policy). 2005 Demographics Profile of the Military Community. Washington, DC: Office of the Deputy Under Secretary of Defense; 2005. http://cs.mhf.dod.mil/content/dav/mhf/QOL-Library/PDF/MHF/QOL Resources/Reports/2005 Demographics Report.pdf. Accessed August 25, 2008., as cited in: Chartrand et al, “Effect of Parent’s Wartime Deployment on the Behavior of Young Children in Military Families” in Pediatrics & Adolescent Medicine, vol. 162, no. 11, November 2008. Available at www.archpediatrics.com. By taking on tough issues in ways children can understand, Sesame Street is increasing the odds of emotional wellness, helping a generation of children in military families develop emotional strength and resilience. When A

MUppetS on A MISSIon pARent IS “ For one brief hour…there were no Iraq or Afghanistan deployed, wars. No moms and dads the entIRe fAMIly IS deployed in harm’s way in a far-off land. No missed holidays, Taking her friend Elmo’s advice, Rosita finally tells birthdays, anniversaries, her parents how hard it’s been since her father school plays…” 1

returned home in a wheelchair. “I just wish things That’s how one reviewer could go back to the way they were,” she cries. described the first-of-its-kind “I don’t like it! I wish things didn’t change.” Sesame Street – USO Tour. Elmo and friends crisscrossed Rosita drops her head in sadness, and so begins a the country to 42 military story that all military families will recognize. It’s a installations in 23 states, story of coping with the challenges of deployment, performing for free in 106 homecomings, changes due to a combat-related live shows reaching 76,000 children and caregivers. injury, and (in development for next summer) the “Do you ever feel sad, like most difficult challenge of all: the death of a loved one. when you miss your Mommy Sesame Street’s multi-phased, bilingual (English/ and Daddy?” is one of the Spanish) outreach program is helping young children questions Elmo poses to his in military families build emotional strength and young audience. It opens the lines of communication, helps resilience while one or both parents are deployed. parents find a way to listen to children’s concerns, and makes “ I never thought that Elmo could make an Airborne clear that military families Ranger cry. I’ve just returned from a second aren’t in this alone; they have deployment to Iraq. My daughter was 5 months a friend in Sesame Street. old when I left and she didn’t know who I was when I returned. The video brought out emotions I never realized I had. I know that I will go back overseas again and when I do, these videos will be an integral part of how I prepare my soldiers’ families and… how I prepare my family.”2

1) Hagee, Chuck. “Elmo and Buddies Conquer Fort Belvoir: USO and Sesame Street Combine to Ease Deployment Emotions,” Mount Vernon Gazette October 23, 2008. 2) Anonymous quote, Airborne Ranger. One in three of the world’s 115 million primary-age children who are not in school lives in a conflict- affected area.1

In nations emerging from conflict, Sesame projects become part of the peace process, helping young children develop skills for a shared future.

1) Save the Children, Rewrite the Future: Education for Children in Conflict-Affected Countries (London: International Save the Children Alliance, 2006), http://www.savethechildren.org/newsroom/2006/armed-conflict-creating-crisis-in-education.html Sesame Street helps children develop the skills to challenge ignorance, dispel stereotypes, and champion diversity — skills that contribute in no small way to increasing the odds of peace. MUPPET DIPLOMACY believing in a shared future

“Even if Sesame can’t Building on more than two decades completely convert of programming in Israel, the Sesame Street [children] into being coproduction focuses on helping openly accepting of children develop empathy and respect for ethnic, one another, at least cultural, and religious diversity within their own when they grow up to be parents, they’ll country. Broadcast in Hebrew and Arabic, the series be more tolerant than introduces Jewish children to Arab culture and their parents were, individuals, Arab-Israeli children to Jewish ones, and the next generation and each to Ethiopian, Russian, and other immigrant will have a much better communities to model an inclusive future where chance.”

Israelis of all backgrounds live together in peace. – Rosemary Fieth, Former Head of Office, UNICEF Kosovo Shara’a Simsim (Sesame Street) serves as a catalyst for positive change, empowering young boys and girls in the West Bank and Gaza through positive role modeling. The locally produced series Finding Common Ground is helping a new generation of children appreciate Research makes clear that diversity, take pride in their Palestinian culture and Rruga Sesam and Ulica Sezam, Kosovo’s Sesame identity, and believe in a better future. Street in the Albanian and Serbian languages

Bridging Divides respectively, is having the intended effect: Children New this year in Northern who watched were more Ireland, is helping likely than those who did children develop an openness to not to demonstrate positive and curiosity about others as a attitudes toward children bridge to peace and stability. from different ethnic backgrounds. 1 1) Fluent Public Opinion & Market Research, Assessment of Educational Impact of Rruga Sesam and Ulica Sezam in Kosovo: Report of Findings. New York, 2008. In Tanzania, malaria is the single greatest cause of sickness and death, and young children are the hardest hit: Four out of five deaths from malaria are among children under age 5.1

New this year, Sesame Street in Tanzania is projected to reach 1.4 million children and caregivers with strategies to prevent malaria and reduce its impact.

1) President’s Malaria Initiative, Country Profile: Tanzania, May 2008, http://www.fightingmalaria.gov/countries/profiles/tanzania_profile.pdf Whether it’s fighting malaria in Tanzania or reducing the stigma of HIV/AIDS in , Sesame Street is increasing the odds that children grow up to live long and healthy lives.

Parents and caregivers who viewed ’s companion Tackling HIV/AIDS television special on HIV/AIDS were two Ninety percent of the world’s times more likely to 2 million children with HIV/ talk with their children AIDS live in sub-Saharan about HIV than those Africa. Millions more in the who had not watched. 1 region are affected – in fact, 12 million children lost one or both parents to the disease in Malaria Meets 2007.2 Takalani Sesame, the South African coproduction Muppets of Sesame Street, has been reaching upwards of 2 million Joining the Fight against Global Disease viewers annually since 2003, Sesame Street is bringing its unique capacity to helping to reduce the fear and stigma associated with HIV/ connect with kids to the fight against malaria in AIDS that prevent so many Tanzania. Kilimani Sesame, the educational program from seeking and receiving that draws on the South African coproduction of care. , the world’s first Sesame Street, is, in addition to teaching letters Muppet with HIV, is at the and numbers, delivering messages about malaria heart of this pioneering effort, prevention through television, radio, print, and giving voice to complex issues in child-friendly ways that serve community outreach. Kilimani Sesame is now also to break a culture of silence part of the “Malaria No More” effort to eradicate and make a difference, now the disease by 2015. and for generations to come.

Children exposed to Takalani Sesame show measurable growth in HIV/AIDS knowledge and attitudes, including basic knowledge of the disease, blood safety, destigmatization In3 Tanzania, only 1 31% of 3 and coping with illness. children ages 5 and under sleep under a mosquito net; only 16% sleep under 1) Health and Development Africa, Impact Assessment of a New Programming Component on HIV/AIDS for a treated mosquito net, Takalani Sesame, Johannesburg, South Africa, 2005. 2) UNICEF, Children and AIDS: Second Stocktaking Report, Unite for Children Unite Against AIDS, 2008. and only 58% with a fever 3) Khulisa Management Services, Impact Assessment of Takalani Sesame Season II Programme, receive anti-malaria drugs.4 Johannesburg, South Africa, 2005. 4) UNICEF, South Africa Statistics (2003–06), 2008. Sesame Street is also working to combat the epidemic of childhood obesity in the United States and elsewhere around the world, increasing the odds that children develop healthy habits for life. We know media alone can’t solve the A CookIe IS problems of our world, but we just A SoMetIMeS as surely know, based on almost four food decades of experience and research, Over the past three decades, the childhood obesity that they increase the odds of rate in the United States has more than doubled for children ages 2 to 5 and more than 80 percent providing solutions. of obese children become that way before age 6. 1

Recognizing that children’s food preferences and attitudes about physical activities are set at an plAzA SéSAMo hABItoS SAlUdABleS early age, Sesame Street launched Healthy Habits pARA todA lA vIdA for Life, a cross-platform initiative to combat the Healthy Habits for Life is epidemic of childhood obesity by helping children at work in Colombia and get excited about eating healthy foods and moving Mexico through Plaza Sésamo, the Spanish- their bodies. language coproduction of Sesame Street seen throughout the Americas. In Colombia, Sesame Workshop has partnered with the World Heart Federation to promote cardiovascular health and well-being for Colombian children. In Mexico, early research indicates that help foR At- R ISk WoMen, InfAntS, And ChIldRen children make healthier New this year, in partnership with the National WIC Association food choices and gain (NWA), 3.5 million Healthy Habits for Life multimedia kits knowledge about good are being distributed to low-income, nutritionally at-risk health and hygiene after mothers and young children throughout the United States. exposure to the Healthy NWA member agencies provide supplemental food assistance, Habits project. nutrition education, health care, and social service referrals to nearly 9 million mothers and young children every month and are the single greatest point of access to the nation’s 1) NHANES, “Data on the Prevalence of Overweight Among Children and Adolescents,” preschool children. Pediatrics 115 (2005): 348–51. Forty-five percent of children ages 5 and under in the United States spend almost as much time with new media – Internet, video and computer games, and handheld devices – as they do watching TV.1

Just as Sesame Street reinvented TV to educate preschoolers, so too is it transforming the web and other media platforms to advance learning.

1) Sesame Workshop, Sesame Street Brand Tracking, 2009. Sesame Street is increasing the odds that media educate children and enrich their lives.

the CenteR At SeSAMe WoRkShop In 1966, Joan Ganz Cooney and her colleagues at Sesame Workshop, posed a simple but transformative question: “Can 2/3+ television be used to help preschoolers learn?” The answer, More than two-thirds (68%) in the form of Sesame Street, continues to be a resounding yes. of all children under age 2 Today, the newly established Joan Ganz Cooney Center is use “screen” media (tv, video, exploring the twenty-first century equivalent of that question, dvd, computer, video games) with a mission to catalyze and support research, innovation, an average of just over two hours every day. 1 and investment in digital media technologies to advance children’s learning. SoRtIng pIgS And pengUInS And otheR onlIne InnovAtIonS Launched in August 2008, Sesame Street’s new Web site offers its audiences rich opportunities for learning. A number of features distinguish the new site. First, and unique among its contemporaries, it’s free; there are no subscription barriers to education. Second, the site is safe. Through a new feature known as PlaySafe,TM parents can set up a simple, “gated” environment, effectively preventing their children from navigating away from selected activities. And, third, the site offers “Sesame Playlists,” a curated collection of games and videos organized around a single educational theme (such as counting or sorting pigs and penguins) led by a member of the Muppet family. The new site reflects the latest thinking about the medium in the service of children, using the Web’s unique functionality to promote discovery and self-expression.

In the past year, Sesame Street podcasts and other digital content have been streamed or downloaded more than 30 million times. Two weeks after launching in September 2007, Sesame Street podcasts reached the #1 slot on iTunes and have remained one of the most popular kids’ podcasts since.

WWW.SeSAMeStReet.oRg

1) V. Rideout, D.F. Roberts, U.G. Foehr, Generation M: Media in the Lives of 8 - 18 Year-olds, The Henry J. Kaiser Family Foundation, March 2005. A Message from the President

Dear Friend, year, in . Here our Sesame Street coproduction, As we often say at the Workshop, “It’s not whether children learn Sesame Tree, is helping young children growing up in a divided from media, it’s what they’re learning.” After all, children are learning society develop skills for a shared future. all the time. That’s their job; it’s what they do. Our responsibility, our Think too about the way our characters collective responsibility, is to make sure they have opportunities to have joined the fight against malaria, learn in ways that serve them, and indeed all of us, well. the leading cause of death for children 2 billion children in the world; under age 5 in Africa. In addition to That’s where we come in. 2 billion reasons teaching letters and numbers, our new to keep working. For almost forty years, Sesame Workshop has been using media – early-childhood-education initiative 2 multiple forms of media – to help children dream and discover, under- in Tanzania, Kilimani Sesame, is using television, radio, print, and stand the world and their place in it, and perhaps most important, community outreach to promote the use of bed nets and is now also reach their highest potential. part of the “Malaria No More” effort to eradicate the disease by 2015. This means, in addition to letters Here at home and throughout the Americas, our Healthy Habits for “It’s not whether and numbers, our content also Life initiative is continuing to combat the epidemic of childhood obesity. promotes learning about tolerance, children learn from I’m pleased to report that upwards of 3.5 million Healthy Habits for inclusion, resilience, problem Life kits, Sesame-based multimedia resources, will be distributed in media, it’s what solving, healthy habits, and more. the United States through our new partnership with the National In other words, we’re using media they’re learning.” WIC Association. NWA member agencies provide supplemental food to increase the odds of creating a assistance, health care, and social service referrals to nearly 9 million better world. low-income women, infants, and children every month and, especially Think, for example, about what we call “Muppet Diplomacy.” In its significant for us, are the single greatest point of access to the nation’s simplest form, this means using our characters – characters children preschool children. love and parents trust – to bridge some of the world’s most intractable Finally, I want to call attention to our new broadband-enhanced divides. It works because no matter our country, our culture, our Web site. Again, this is about increasing the odds that media cause, we all share a commitment to a better future for our children – support learning not just by having educational options in every a commitment and a conviction that the way forward is through platform, but by optimizing the unique capacities of each to enrich education. As a result, our characters can take on the tough issues the educational experience. children confront in Israel and Palestine, in Kosovo, and new this

28 Sesame Workshop 2008 Annual Report Sesame Workshop 2008 Annual Report 29 A Message from the President

A number of features distinguish As a nonprofit organization, Sesame Workshop relies no matter our country, our our new site, www.sesamestreet.org, not only on philanthropic support but also on income culture, our cause, we all but one quality in particular is from the sale of Sesame Street and other Workshop share a commitment to a worth highlighting: All content products to fund educational programs that help better future for our children. on the site is free. Unique among children everywhere learn and grow. We partner its contemporaries, there are no with best-in-class organizations that believe in our subscription barriers to education. This means too that we need support to keep the site going. And while we recognize the challenge, initiatives and share our vision. In addition to the especially in today’s economy, support for our Web site is essential if many supporters listed throughout this year’s report, we’re to ensure continued widespread access. we’d also like to recognize the following partners that What we teach our children matters. And because it matters, we have help advance our educational work around the world: an obligation to make sure the media serve as allies to education. This American greetings learning horizons is, in fact, the promise of Sesame Workshop: to effect positive change on Apple & eve Mattel/fisher-price a scale unique to media that begins with each individual child – change Apple, Inc. nova development as ephemeral as laughter and as enduring as learning to read, change Beaches Resorts the parenting group that increases the odds that all children reach their highest potential. Bendon publishing procter & gamble Busch entertainment Corporation publications International ltd. There’s something else we often say at the Workshop: Media can’t Children’s Apparel network Random house by themselves solve the many problems of our world, but they can del Monte foods Sunkist greatly contribute to the solutions. With just over 2 billion children in genius products, llC Universal Studios theme parks the world, we have 2 billion reasons to keep working. gund, Inc. vee Corporation () hain Celestial group, Inc. verizon We hope you’ll join us, and together, we can continue to increase the odds. koch Records Sincerely,

Gary E. Knell President and CEO

30 Programs and Initiatives

Alam Simsim (Egypt) preschoolers appreciate Funding Partners: Plaza Sésamo Project Partner: Funding Partners: This uniquely Egyptian cultural diversity and develop United States Agency for (Mexico/Latin America/ Gold Zebra Communications, Canadian International Sesame Street for television reading, math, and life skills. International Development United States) Ltd. (Channel Hop!) Development Agency (CIDA) and community outreach (USAID) This Spanish-language The German Institute for Broadcast Partners: Funding Partners: helps prepare children for ArtVenture coproduction of Sesame Street Foreign Cultural Relations Cartoon Network is broadcast throughout the Gruss Lipper school, with a particular Family Foundation (ifa) emphasis on educating girls. Doordarshan Americas and promotes school Gruss Life Monument Fund Netherlands Ministry of Pogo (Indonesia) readiness and healthy habits Foreign Affairs Broadcast Partner: The Indonesian Sesame Street while showcasing cultural American Greetings Egyptian Television Project Partners: Organization for Security debuted on television in diversity from Latin America Ted Arison Family Turner Entertainment and Cooperation in Europe Project Partners: 2008, promoting literacy and and around the world. Foundation Networks Asia (OSCE) character building, as well AlKarma Edutainment Broadcast Partners: Joseph and Harvey Meyerhoff Swedish International Sesame Workshop India as respect for diversity and Egyptian Ministry Televisa Family Charitable Funds Development Cooperation the environment. of Education Production Partner: Discovery Kids Latin America Righteous Persons Agency (SIDA) Miditech Pvt. Ltd. Project Partner: Foundation Funding Partner: Telefutura UNICEF Creative Indigo Production Bernard van Leer Foundation United States Agency Funding Partners: PBS United States Agency for for International Michael & Susan Dell Fohs Foundation International Development Funding Partner: PBS Kids Sprout Development (USAID) Foundation (USAID) United States Agency for Rosenzweig-Coopersmith V-Me Mobinil Turner Entertainment International Development Foundation (USAID) Sesame Street Networks Asia Project Partner: Alan B. Slifka Foundation (United States) World Heart Federation Joyce and Irving Goldman Entering its fortieth (for the Arab World) Development Funding: Kilimani Sesame (Colombia) Broadcast throughout ICICI Bank Limited (Tanzania) Family Foundation consecutive season, Launched in 2008, this Funding Partners: Sesame Street continues twenty-two Arabic-speaking United States Agency for Mr. and Mrs. Julio Mario and Rruga Sesam/Ulica to set the gold standard for nations, Alam Simsim (for International Development multimedia early-childhood- Beatrice Santo Domingo Sezam (Kosovo) excellence in educational the Arab World) celebrates (USAID) education initiative based on the rich cultural diversity of the South African coproduction (Colombia) This Sesame Street media, giving children the coproduction, produced in the region while helping Hikayat Simsim (Jordan) of Sesame Street includes a Qualtia Alimentos (Mexico) best head start in school two languages, Albanian and life. preschoolers develop respect Following the success of the special malaria component to Tetra Pak (Mexico) and Serbian, promotes for differences and learn basic original Sesame Stories in prevent malaria and reduce awareness and understanding Broadcast Partners: literacy and math skills. 2003, Hikayat Simsim its impact. Rechov Sumsum (Israel) of Kosovo’s multiethnic society PBS premiered in 2007 with a Building on more than two Broadcast Partner: Broadcast Partner: at the same time it advances PBS Kids Sprout focus on Jordanian culture decades of Sesame Street Future Television Tanzania Broadcasting early childhood education. and school readiness. Corporation and Zanzibar programming in Israel, this Funding Partners: Project Partner: Television multimedia initiative helps Broadcast Partners: AstraZeneca, LLP Broadcast Partner: AlKarma Edutainment children develop empathy Radio Television of Kosovo Hain Celestial Group, Inc. Jordan Television Project Partner: and respect for diversity (RTK) Funding Partner: Aeigies Productions McDonald’s Corporation within the country, while The Mosaic Foundation Project Partners: TV Hero the Rechov Sumsum project’s New Balance Athletic Shoe, Inc. Jordanian Ministry Funding Partners: TV Most Unique Vacations, Inc., Galli Galli Sim Sim (India) of Education United States Agency for counterpart, Shalom Sesame, International Development extends the series to English- TV Puls worldwide representatives With an extensive outreach Jordan Pioneers (USAID) speaking audiences. for Beaches Resorts program run by Sesame Project Partners: Corporation for Workshop India, the Indian Stavros S. Niarchos Broadcast Partner: CMB Productions Foundation Public Broadcasting (CPB) coproduction of Sesame Street Channel Hop! UNICEF debuted in 2006 to help

32 Sesame Workshop 2008 Annual Report Sesame Workshop 2008 Annual Report 33 Programs and Initiatives

Sesame Tree Sesamstrasse Funding Partners: Broadcast Partner: help preschoolers develop Funding Partners: (Northern Ireland) (Germany) United States Agency for South African Broadcasting early literacy, math and American Greetings In a society emerging On air since 1973, this International Development Corporation (SABC) cognitive skills, as well as Corporation for Public from conflict, this new Sesame Street coproduction (USAID) Project Partners: respect for diversity and Broadcasting coproduction presents helps children learn the environment. Netherlands Ministry Kwasukasukela Kellogg USA, Inc. messages of diversity and through discovery, with a of Foreign Affairs cooperation among Northern new curriculum to foster South African National Broadcast Partner: United States Department of Righteous Persons Department of Education TV Cultura Education (Ready-to-Learn) Ireland’s young children. awareness of and respect Foundation for Germany’s increasingly Funding Partners: Broadcast Partners: The Adventures The Electric Company diverse population. (Bangladesh) SANLAM Life BBC-Northern Ireland of and Ernie Debuting in 2009 and inspired Launched in 2005, this Insurance Limited CBeebies Broadcast Partners: New in 2008, this recurring by the 1970s series of the Sesame Street coproduction, Norddeutscher Rundfunk United States Agency for segment on Sesame Street same name, The Electric Project Partner: on television and through International Development (NDR) in the United States and Company brings literacy community outreach, (USAID) SixteenSouth KiKa (Der Kinderkanal) around the world takes to life on mulitple platforms provides access to The Mai Family Foundation our classic duo into the for struggling readers ages Funding Partners: Arbeitsgemeinschaft der educational opportunities Stavros S. Niarchos world of clay animation to 6 to 9, especially those from The American Ireland Fund öffentlichrechtlichen for all Bangladeshi children. Foundation focus on critical thinking, low-income families. International Rundfunkanstalten Deutschlands (ARD) Broadcast Partner: friendship, and acceptance Fund for Ireland Broadcast Partner: Bangladesh Television (BTV) Ulitsa Sezam (Russia) of differing perspectives. Project Partner: PBS Northern Ireland Fund for First broadcast in 1996, Ulitsa Reconciliation Norddeutscher Rundfunk Project Partner: Project Partner: Sezam focuses on helping Funding Partners: (NDR)/ Studio Hamburg Nayantara Communications Misseri Studio, Italy Northern Ireland Screen Russia’s youngest citizens Corporation for develop the skills to thrive in Broadcast Partners: Public Broadcasting Shara’a Simsim Outreach Partners: (Palestine Project) Save the Children an open society, maintain a Germany: Norddeutscher (The Netherlands) United States Department of healthy lifestyle, and gain an Rundfunk (NDR) Education (Ready-to-Learn) Now in its thirty-third season, Launched in 2007 and based bracNet on the success of similar awareness of and appreciation United Kingdom: Channel 5 the Dutch coproduction of Funding Partners: projects in 1998 and 2003, for diversity. Broadcasting Limited (Five) Every day is a Reading Sesame Street focuses on Unilever Bangladesh Ltd. and Writing Day children’s socioemotional this new Shara’a Simsim, Broadcast Partner: United States Agency for Dragon Tales Piloted in May 2007 in rural development with an emphasis on television and through CTC International Development Mississippi communities, on music and the arts. community outreach, lays Launched in 1999, Dragon the foundation for early (USAID) Project Partners: Tales helps children in the this multimedia educational Broadcast Partners: childhood education Ministry of Education United States and around outreach initiative gives Takalani Sesame and Science of the Nederlandse Programma while emphasizing pride the world with the “three Rs” child-care providers and (South Africa) Russian Federation Stichting (NPS) in Palestinian culture and of early childhood education: parents easy-to-use strategies Launched in 2002, the Nederlandse Omroep identity for young viewers Ritm TV, a subsidiary resilience, relationships, to develop early literacy skills South African coproduction Stichting (NOS) in the West Bank and Gaza. of DIXI-TV Productions and readiness. in preschoolers. on television, radio, and Zappelin Broadcast Partners: community outreach helps Funding Partner: Broadcast Partners: Project Partner: Ma’an Television children learn basic literacy, Nestlé Food LLC PBS Mississippi State University, Project Partner: Rural Early Childhood Nederlandse Programma math, and life skills, with a Project Partner: Vila Sésamo (Brazil) PBS Kids Sprout Learning Initiatives, Stichting (NPS) first-of-its-kind curriculum to Early Childhood Institute Palestinian Education Originally airing in Brazil Project Partner: Media Network reduce the fear and stigma associated with HIV/AIDS. from 1972 to 1977 as Sesame Sony Pictures Television Funding Partner: Al Quds University, Street’s first international United States Institute of Modern Media coproduction, Vila Sésamo Department of Education relaunched in 2007 to

34 Sesame Workshop 2008 Annual Report Sesame Workshop 2008 Annual Report 35 Programs and Initiatives

Happy, Healthy, Ready Let’s Get Ready! Project Partners: Pinky Dinky Doo Sesame Street Military OneSource for School: “Learning Preparing Families Presents: The Body Adler Planetarium Now in its second season in the Wal-Mart Stores, Inc. is Everywhere” for Emergencies United States, United Kingdom Part of the Healthy Habits for Beijing Planetarium American Greetings Launched in October 2007 and Launched in September 2008, and Latin America, this Life initiative, this traveling Liberty Science Center slated to continue through Let’s Get Ready! is a bilingual animated series encourages museum exhibit, set in the Corporation for Public 2009, this partnership between (English/Spanish) educational Major Funders: literacy in 4- to 7-year-olds familiar and reassuring Broadcasting Sesame Workshop and PNC outreach initiative to help National Science Foundation through the power of world of Sesame Street, helps New York State Office of entire families, specifically Grow Up Great includes PNC Foundation storytelling. Pinky Dinky Doo children understand the Mental Health bilingual (English/Spanish) families with young children, introduces children to the importance of eating right, USO to plan and prepare together print materials, online Additional Supporters: building blocks of narrative, exercising, and establishing in age-appropriate and Military Child Education resources, and a Sesame W.L.S. Spencer Foundation expands their vocabulary, and healthy habits. engaging ways. Coalition Street DVD designed to China Association for Science helps them make the critical Project Partner: Joseph Drown Foundation improve school readiness by and Technology transition from “learning Produced in partnership Thinkwell Design encouraging parents and PBS with and funded by American National Natural Science to read” to “reading to learn.” and Production children to embrace everyday Greetings. Created in Foundation of China Broadcast Partners: VEE Corporation learning opportunities. collaboration with Ready Kids Funding Partner: VMe Noggin New Balance Project Partner: and Ad Council. Additional : Where Kids Shape the World British Broadcasting Athletic Shoe, Inc. The PNC Financial support provided by The Corporation (BBC/CBeebies) What’s the Word Services Group, Inc. Blanche and Irving Laurie Available online since the on the Street? Foundation. Initial support fall of 2007 in Arabic, English, Talk, Listen, Connect: Discovery Kids Latin America Launched in Sesame Street’s Funding Partner: provided by Bear Stearns Japanese, Mandarin, and Helping Families During Australian Broadcasting thirty-eighth season, this The PNC Financial Charitable Foundation. Spanish, and distributed Military Deployment Corporation (ABC) recurring show segment, also Services Group, Inc. In consultation with the around the world by Primetime Special – Super RTL available as podcasts and Department of Pediatrics partner organizations, the When Parents are Deployed Disney Germany outreach materials, puts into Healthy Habits for of Weill Medical College multiplatform Panwapa Deployments, Life Resource Kit action the idea that exposure of Cornell University. promotes global citizenship Univision Homecomings, Changes to a word in multiple contexts Developed in October 2007, Sesame Street Experience for in 5- to 8-year-olds. Project Partners: this multimedia, bilingual One World, One Sky: Military Families (USO Tour) helps it become part of a Cartoon Pizza, Inc. (Spanish/English) resource ’s Adventure Project Partner: child’s vocabulary. With two kits in widespread kit offers child-care providers, Merrill Lynch Foundation PDD2 Inc. Featuring American Sesame distribution and a third Distribution Partners: parents, and young children, Street characters and their Additional Abrams Gentile in development, these Children & Families especially those from counterparts from the Entertainment, Inc. Supporting Partners: multicomponent, bilingual Commission of Orange underserved communities Chinese Zhima Jie, this Boeing Foundation (English/Spanish) outreach County and most at risk for obesity, cross-cultural planetarium initiatives use the Sesame strategies to integrate Annenberg Foundation PBS Ready-to-Learn project introduces astronomy Broadcast throughout Street characters children healthy eating and physical Coordinators to young children in the Distribution Partners: Europe, Canada, Asia, the love and parents trust to activity into everyday life. Apple iTunes United States and China. PBS Kids Middle East, Australia, and help families experiencing The project also helps children the Caribbean, as well as on Project Partner: PBS Kids Sprout deployments, multiple develop an appreciation Armed Forces Radio and KidsHealth and Apple Learning Interchange deployments, and changes Nemours Health and for one another’s cultures Television Services, Play With due to combat-related Curriki Prevention Services through the idea that, Me Sesame fosters individual injuries. regardless of where we live, Oxfam Education creative expression through Funding Partner: we all share the same sky. social interaction. Project Partners: Children for Children KidsHealth and Defense Centers of Excellence Nemours Health and Girl Scouts of the USA Broadcast Partner: for Psychological Health Prevention Services PBS Kids Sprout and Traumatic Brain Injury

36 Sesame Workshop 2008 Annual Report Sesame Workshop 2008 Annual Report 37 Major Supporters

Sesame Workshop gratefully acknowledges the generous support of our National Conference for Turner Broadcasting $7,500-$14,999 Community and Justice System, Inc. partners and donors around the world. Your commitment enables us to Anonymous Tiger Baron Foundation The Walt Disney Company harness the educational power of media to bring learning and life skills Jeffrey Bilhuber Time Warner Inc. Washington Mutual Bank to millions of children in more than 140 countries every day. Thank you. Booz Allen Hamilton Toys”R”Us, Inc. Cravath, Swaine & UNESCO $15,000-$24,999 Moore LLP Unilever Bangladesh Ltd. $1,000,000 Turner Entertainment PNC Foundation AARP Services, Inc. Melvin R. Goodes Networks Asia VEE Corporation Family Foundation American Greetings Qualtia Alimentos AEA Investors LLC Unique Vacations, Inc., Shoshanna and Josh Gruss The American Ireland Fund Righteous Persons Foundation Apple Professional worldwide representatives The Jane Henson Foundation AstraZeneca, LLP for Beaches Resorts Wal-Mart Stores, Inc. $25,000-$49,999 Development HBO Joan Ganz Cooney and Dick and Diana Beattie United States Agency for Abbott Peter G. Peterson International Development CIGNEX Technologies, Inc MetLife Foundation $100,000- Fabiola Arredondo and Corporation for (USAID) Lloyd and Mary Morrisett $249,999 Andrew Rolfe Citigroup Public Broadcasting United States QUALCOMM Incorporated Joanna Barsh and Comcast Programming Group Defense Centers of Excellence Department of Education The Annenberg Foundation David Garbasz Davis Wright Tremaine LLP Lauren Seikaly and for Psychological Health and World Heart Federation Fohs Foundation Michael Huber Traumatic Brain Injury Bloomberg Draft FCB NAMM, The International Source Media Genius Products, LLC Connie and William Doré EMI Music Publishing Music Products Association Jeffrey and Lynn Watanabe Gruss Life Monument Fund $500,000- Joseph Drown Foundation Ernst & Young LLP New York State Office of Sherrie and David Westin The Gruss Lipper $999,999 Mental Health Electronic Arts FTI Consulting, Inc. Family Foundation Ted Arison Family Foundation Northern Ireland Jane Hartley and Judy and Steven Gluckstern Mattel/Fisher-Price The Bear Stearns Fund for Reconciliation Ralph Schlosstein Grant Thornton LLP $2,500-$7,499 Charitable Foundation McDonald’s Corporation Procter & Gamble The Marc Haas Foundation Rachel Hines and Judy and John Angelo Hain Celestial Group, Inc. Merrill Lynch Foundation Tetra Pak Susan and Bert Kobayashi Michael Cembalest Anonymous International Fund for Ireland Michael & Susan Dell USO Blanche & Irving Laurie Gary E. Knell and Kim Larson Arent Fox LLP Foundation The Mai Family Foundation Foundation Bernard van Leer Foundation Macy’s Parade and Ariel Investments National Science Foundation Military OneSource Connie and Bob Lurie Entertainment Group W.L.S. Spencer Foundation Gigi Arledge New Balance Athletic Shoe, Inc. The Mosaic Foundation McGraw-Hill Education Amanda and Ned S. Offit Bank of America Office of the Assistant McKinsey & Company Holly Peterson and $50,000-$99,999 Bank of New York Mellon Secretary of Defense for Provo Craft & Novelty, Inc Rick Kimball Health Affairs $250,000- Steffi and Robert Berne ArtVenture Keith and Rose-Lee Reinhard Prudential PBS $499,999 The Assisi Foundation of Hal G. Rosenbluth The Bloomingdale’s Fund of Rosenzweig-Coopersmith the Macy’s Foundation The PNC Financial Ad Council Memphis, Inc. Foundation Simpson Thacher & Services Group, Inc. Mary and David Boies Boeing Global Corporate Robert C. Atkins Foundation /Busch Bartlett LLP SANLAM Life Citizenship Group Sir Evelyn and Entertainment Corporation Alan B. Slifka Foundation Dan Burstein and Insurance Limited Julie O’Connor Joseph and Harvey Meyerhoff Lady Lynn de Rothschild Susan and Peter Solomon Richard Steadman Julio Mario and Family Charitable Funds Vincent and Anne Mai Carver Bancorp, Inc. Beatrice Santo Domingo The Starr Foundation Thirteen/WNET New York Netherlands Ministry of Military Child Education and WLIW21 Susanna Choy South African Broadcasting Foreign Affairs Coalition The Cole Family Foundation Corporation (SABC) Transworld Television Stavros S. Niarchos Foundation Corporation

38 Sesame Workshop 2008 Annual Report Sesame Workshop 2008 Annual Report 39 Major Supporters

Crossroads Property David Rockefeller Beth and Ron Dozoretz Morgan, Lewis & Bockius, LLP Charlotte and Taylor Chess Holly Strutt Strategies LLC Richard E. Salomon Peggy and Millard Drexler Diane and Chris Nesbitt Connecticut Council for Brian Towles the Social Studies Jodie and John Eastman Mr. and Mrs. Susie Ellis Norman Foundation Wynn Resorts Laura Corb Lewis M. Eisenberg Family, Stephen A. Schwarzman Susan Finkelstein Sandie and Frank O’Connor The Ironhill Foundation Marla and Brian Erisman This listing includes those Sony Corporation of America Paula and Patrick Foley John and Trish O’Donnell individuals and organizations Concepcion S. and Susan Stein Shiva Foundation Joan O’Neil Sheril Freedman that made a gift or pledge or Irwin Federman The Glickenhaus Foundation Mr. and Mrs. William Garlock funded a project that was Ann Tenenbaum and Joseph Grano, Jr. Emily and Tony Pantaleoni Terry Fitzpatrick Thomas H. Lee ongoing between July 1, 2007 Susan and Alan Patricof Susan Geraci Friedman Kaplan Seiler & Myrna and Steve Greenberg and June 30, 2008. U.S. Fund for UNICEF Ginsey Industries, Inc. Adelman LLP Eve Hall Kate and Todd Petzel Maureen White and Veronique and Robert Pittman Jane and Ron Gother Joyce and Irving Goldman Steven Rattner The Hartley Foundation The Joan Family Foundation Bertine Razon Frances and Frank Guinta Howard L. Wolfson Larry G. Hatfield Ganz Cooney Martín Gómez Riggs Distributing, Inc. Susan Hanson The Hon. Kimba M. Wood Sunil and Blanca Hirani Maura Harway and Center Cheryl and Fred Halpern and Frank Richardson The Marshall Dr. Walt Hopkins Richard Mark Cheryl Henson and Ed Finn Rose Family Foundation The following donors have Karen and Kenneth Yontz Jon Huggett supported The Joan Ganz A. M. Rosenthal Anne and John Herrmann Fred Kassner Family Cooney Center. Established Linda and Morton Janklow Laura and Jeff Hill Foundation Dr. and Mrs. in 2007 to honor Sesame Kauff McClain & $1,000-$2,499 Philip A. Kaiser Mitchell Rosenthal Jacmel Jewelry Workshop’s founder, the McGuire LLP Abramson Family Foundation Wanda and Robert Kelley Amanda L. Rowan Laura and Jeff Jaworski Center champions research, innovation, and investment in The Lauder Foundation, Kurt S. Adler, Inc. James P. Kelly Julienne Scanlon Teresa Jennings Leonard and digital media technologies to Susan Allen Mr. and Mrs. Jacquie and Elliot Segal Claudia and Jim Joyce advance children’s learning. Evelyn Lauder Fund Hans W. Kertess Anonymous Melanie Shorin Myung Kang-Huneke and Steven Leuthold Peter G. Peterson Susan and Frederick Kolar Jonathan Huneke Family Foundation Drs. Lewis Bernstein Solo Cup Company Fund at The New York Doug and Emily Kramer Lionsgate and Gaya Aranoff Arlene Spiegelman Cynthia Kim Community Trust Karyn and Kevin Lamb Longview Foundation Kathryne and Gene Bishop Janice Therrien Nancy and Richard Knowlton Genius Products, LLC Maru Leon and David Griffin Ray McGuire and Martha Bostian Toy Island Andrea Lee Mattel Sanford M. Litvack and Crystal McCrary Mona and Simon Brown Thomas Lennon Robert Wood Johnson Joanna R. Swomley Sharon and Thurston Bethany and Scott Budde and Twigg-Smith Jackie and John Leo Foundation Margaret Loesch/ Robert B. Millard Charlotte Cole McGraw-Hill Education The Hatchery, LLC Daniel Victor and Sandy and Mike McManus H. Melvin and Diana Ming Build-a-Bear Workshop Ester Fuchs Victor Electronic Arts LRF/RM (Leonard R. Friedman Diane Parker Ann Pleshette Murphy Foundation Risk Management, Inc) Ellen Wartella Martha S. Price Corporation for National Geographic Lisa Caputo and Rick Morris Public Broadcasting Arlene Lum and Victor Li Quintilla and Proskauer Rose LLP Education Foundation Marcia M. Carlucci Douglas Whitman PBS Kids Raising Readers The MacNaughton Group Maura Regan and Newmark Knight Frank Leslie Cecil and Wolfensohn Family Foundation Apple Professional Don and Cindy Malin James Henderson Putumayo World Music Creighton Michael Development Gina Maya and Reliance Moving, Meryl and Michael Chae Jeffrey Bilhuber Quatt Associates Richard Capelouto $500-$999 Storage & Installations, Inc. Robert and Courtney Cochrane Longview Foundation Random House Barbara Mayers Helene L. Rosenberg Children’s Books Anonymous Corporate Synergies Group, Inc. Michelle Schwartz Bill D. Mills Elizabeth Baldwin Jessica Reisman Christopher and Larissa and Brian Modesitt Carole and Gordon Segal Amy Robbins Kathryn Dann David Brown and Helen Gurley Brown Jana and Mike Strokes

40 Sesame Workshop 2008 Annual Report Sesame Workshop 2008 Annual Report 41 Management Discussion and Analysis the following pages provide an overview of Sesame Workshop’s financial expenSeS fISCAl yeAR performance for the year ending June 30, 2008. the financial statements of every dollar spent, 83 cents goes directly toExpenses funding the Workshop’s programs.Revenue Prog expenses on pages 45 to 47 are an extract of Sesame Workshop’s audited financial 2008 opeRAtIonS statements, which are available upon request. 4% fundraising And fInAnCIAl 13% general and Administrative 83% program expenses poSItIon SoURCeS of In addition, Sesame Workshop has received In fiscal year 2008, Sesame Workshop continued long-term funding from the United States to expand its programs. Revenues increased fUndIng Agency for International Development (USAID) 12.4 percent leading to net income from operations of $3.8 million. This increase in Sesame Workshop’s long-term success has been to create sustainable, educational media programs in countries including Egypt, South revenue resulted in total program expenditures predicated on forming strategic partnerships syndication of our domestic television series, Africa, Jordan, Kosovo, India, Bangladesh, of $116.4 million, an increase of 16.8 percent with corporations, foundations, and government production and distribution of DVDs and home Tanzania, Indonesia, and the West Bank/ over fiscal year 2007. The value of the Workshop’s agencies to address critical educational needs videos, publication of books and magazines, Gaza. Sesame Workshop’s future financial investments depreciated by $9.3 million in fiscal around the world. For example, initial funding and distribution of video and gaming across strength depends on continued success in year 2008, reflecting the ongoing volatility in partners for Sesame Street, the Workshop’s digital platforms. Sesame Workshop works working with corporations, foundations, and the financial markets, leading to a decrease in flagship preschool series, included the U.S. with distribution partners such as Comcast, government agencies, as well with individuals net assets of $6.1 million in fiscal year 2008. Department of Education, the Corporation for Turner Entertainment, Verizon Wireless, who champion our mission. Public Broadcasting, the Carnegie Corporation Busch Entertainment, VEE Corporation, Sesame Workshop experienced significant of New York, and the Ford Foundation. This Sesame Workshop’s second revenue source is Genius Products, and Random House. growth in both Program Support and combination of public and private financing from the distribution of educational content Distribution Fees and Royalties revenues, Sesame Workshop also relies on income is categorized as “Program Support” in the across all media channels. The organization has while Product Licensing revenue remained from the sale of licensed products to fund its Consolidated Statement of Activities on page 46. successfully undertaken a range of activities flat from fiscal year 2007. The 20 percent educational programs. We partner with growth in Program Support revenue in 2008 Recent examples of these partnerships include that generate revenue while delivering best-in-class licensees that believe in our is primarily due to funding received in support a program to help families cope with military educational content through multiple forms brands and share our vision, including Mattel, of the second phase of our Talk, Listen, Connect deployment, funded by the Department of of distribution. These activities include the American Greetings, Procter & Gamble, initiative, targeted to military families and Defense, Wal-Mart Stores, Inc., American domestic and foreign distribution of local Children’s Apparel Network, and Hain Celestial. which focuses on helping children whose parents Greetings and the N.Y. Office of Mental Health; language television programs, overseas return injured from active military deployment. a school readiness initiative in the United States, In addition to the revenue earned to support Distribution Fees and Royalties increased funded by PNC Bank; a global citizenship the creation and distribution of educational 22 percent in fiscal year 2008, reflecting increased initiative, funded by Merrill Lynch; and a content, the Workshop, similar to other RevenUe Sesame Street home video revenues and the program to help children and their families nonprofit educational institutions, maintains Sixty-four percent of Sesame Workshop’s operating broadcast of the fourth season of our South prepare for emergencies, funded by American revenues are provided by support from institutional an investment portfolio to ensure long-term African co-production, Takalani Sesame. Greetings, the Department of Homeland and individual giving, government and other financial viability, allow for investments agencies, and the distribution of the Workshop’s in research and development, and provide Total operating expenses increased by 13.9 Security/Ad Council, and JPMorgan Chase educational content. the remaining 36 percent financing for educational activities that are (Bear Stearns). Sesame StreetExpenses in the United Revenuecomes from product licensing.Prog expenses percent in fiscal year 2008 to $141.4 million. States, now entering its fortieth season on otherwise difficult to fund. Program Expenses, which account for 82.3 PBS, receives significant financial support 36% product licensing percent of total operating expenses, increased from its corporate sponsors, including Beaches 20% Institutional and by 16.8 percent in fiscal year 2008. This increase Individual giving Resorts, McDonald’s, American Greetings, 8% g overnment and is due to the continued investment in the Hain Celestial, and New Balance. other Agencies redesigned Sesame Street broadband Web site, 36% d istribution fees and Royalties

42 Sesame Workshop 2008 Annual Report Sesame Workshop 2008 Annual Report 43 Management Discussion and Analysis Consolidated Statement of Financial Position As of June 30, 2008 (000’s omitted)

2008 2007 which launched in August 2008; higher SIgnIfICAnt production costs for the thirty-ninth season ASSetS of Sesame Street, including new formats StRAtegIC Cash and Short-Term Investments $ 13,738 $ 18,394 and segments; and initial production of tRAnSACtIonS Receivables The Electric Company, which will broadcast Program and Product Licenses and Contracts in Support 34,974 22,410 in early 2009 on PBS. In fiscal year 2008, In December 2000, the Workshop acquired of Programs, Net of Allowance for Doubtful Accounts Fundraising and General and Administrative the Sesame Street Muppet characters from Grants 9,846 8,836 expenses comprised 17.7 percent of total the Company, a subsidiary of Total Receivables 44,820 31,246 Operating Expenses, down from 19.7 percent EM.TV & Merchandising AG. Full ownership in fiscal year 2007. of the Sesame Street Muppets allows for Inventory 1,374 1,328 greater creative freedom, control of content, Programs in Process 15,102 12,538 Total assets increased by $3.7 million in and enhanced revenue opportunities. In Investments 141,491 145,235 fiscal year 2008. The increase in assets is fiscal year 2006, Sesame Workshop used Intangible Assets 85,807 92,752 primarily the result of increased receivables the proceeds from the sale of a portion of its Fixed Assets 10,914 8,282 from the home video business, investments marketable securities to pay down all but Other Assets 4,045 3,856 in new program production, and capitalized $1.0 million of the outstanding debt incurred Total Assets $ 317,291 $ 313,631 costs associated with the development of in fiscal year 2001 to acquire the characters. the new Sesame Street broadband Web site. lIABIlItIeS And net ASSetS These increases were partially offset by the In September 2002, the Workshop sold its Accounts Payable and Accrued Expenses $ 29,913 $ 23,326 amortization of the Muppet copyright costs 50 percent ownership interest in the Noggin Deferred Revenues 27,892 23,973 and the net unrealized depreciation on the joint venture to its partner, MTV Networks/ Deferred Rent Payable 3,139 3,924 investment portfolio. Viacom. This sale provided capital to expand Debt Payable 1,000 1,000 our mission internationally, remain strong Total Liabilities 61,944 52,223 Total Liabilities increased by $9.7 million in in a highly competitive domestic marketplace, fiscal year 2008, due to the timing of vendor and retire a portion of existing debt. net ASSetS payments and accruals related to Sesame Unrestricted 243,535 254,414 broadband and Sesame Street production In September 2004, the Workshop entered Temporarily Restricted 11,812 6,994 and progress payments from the Corporation into a partnership with Comcast, PBS, and Total Net Assets 255,347 261,408 for Public Broadcasting for the production HIT Entertainment to establish and operate of The Electric Company. a digital cable and video-on-demand service Total Liabilities and Net Assets $ 317,291 $ 313,631 to distribute educational programming to preschool-age children and their families. The channel, named PBS Kids Sprout, premiered first on VOD in April 2005. As of October 2008, the channel reached more than 43.4 million unique TV households (linear and VOD combined).

The following statements are an extract of Sesame Workshop’s audited financial statements for fiscal years 2008 and 2007.

44 Sesame Workshop 2008 Annual Report Sesame Workshop 2008 Annual Report 45 Consolidated Statement of Activities For the year ended June 30, 2008 (000’s omitted) Consolidated Statement of Cash Flows For the year ended June 30, 2008 (000’s omitted)

2008 2007 2008 2007

RevenUeS CASh floWS fRoM opeRAtIng ACtIvItIeS Program Support $ 40,474 $ 33,554 (Decrease) Increase in Net Assets $ (6,061) $ 27,251 Distribution Fees and Royalties 52,716 43,332 Adjustments to Reconcile Increase in Net Assets to Product Licensing 52,036 52,349 Net Cash Provided by Operating Activities Total Revenues 145,226 129,235 Depreciation and Amortization of Property and Equipment 2,088 2,099 expenSeS Amortization of Intangible Assets 6,945 6,944 Amortization of Debt Issuance Costs 171 171 program expenses Amortization of Other Assets 370 369 Education, Research and Outreach 9,821 9,396 Amortization of Programs in Process 25,177 22,853 Content Distribution 40,126 35,572 Decrease in Deferred Rent Payable (785) (386) Production and Development 39,066 28,885 Change in Provision for Uncollectible Receivables 1,010 1,922 Global Product Licensing 10,113 9,409 Decrease (Increase) in Net Unrealized Appreciation on Investments 12,919 (6,751) Global Project Management 6,183 6,078 (Gain) on Sale of Investments (2,314) (14,880) Public Awareness 4,140 3,362 Provision for Inventory Obsolesence 283 (338) Amortization Expense 6,945 6,945 Increase in Receivables (14,584) (3,551) Total Program Expenses 116,394 99,647 (Increase) in Inventories (329) (164) Support expenses (Increase) in Programs in Process (27,741) (21,864) Fundraising 6,139 6,644 (Increase) in Other Assets (730) (111) General and Administrative 18,850 17,829 Increase in Accounts Payable and Accrued Expenses 6,587 85 Total Support Expenses 24,989 24,473 Increase (Decrease) in Program and Product License Revenues 3,919 (2,606) Total Expenses 141,383 124,120 Net Cash Provided by Operating Activities 6,925 11,043

CASh floWS fRoM InveStIng ACtIvItIeS Operating Income (Loss) 3,843 5,115 Net Investment Income (9,270) 22,721 Additions to Property and Equipment (4,720) (2,249) Purchases of Marketable Securities (26,692) (73,087) Interest Expense (269) (308) Proceeds From the Sale of Investments 19,831 66,871 Provision for Income Taxes (365) (277) Net Cash Provided by Investing Activities (11,581) (8,465) Increase (Decrease) in Net Assets $ (6,061) $ 27,251 Net (Decrease) Increase in Cash and Short-Term Investments (4,656) 2,578 Cash and Short-Term Investments, Beginning of Period 18,394 15,816 Cash and Short-Term Investments, End of Period $ 13,738 $ 18,394

46 Sesame Workshop 2008 Annual Report Sesame Workshop 2008 Annual Report 47 Board of Trustees the and Tales” from Dinky Sesame Show™ Television by grant Sesame Pinky a LLC. “Dragon Mr. Vincent A. Mai Mrs. Daniella Lipper Coules Mr. Keith Reinhard Down by Chairman of the Board Managing Director Chairman Emeritus Tristar licensed ©2009 part Upside reserved. Sesame Workshop Maple Stone Capital Advisors DDB Worldwide, Inc. in Company, and reserved. The

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