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.