The information request is presented in three sections:

1. Balance Sheet and Income Statements for year-end 9/30/01 and Roll-Forward to 3/31/02
2. Operating Plan, Projected Balance Sheet and Income Statement for YE 9/30/02 (or CY 2002)
3. Plan for paying off Station Debt
4. Plan for paying off National Debt
5. Other Significant Issues (Station Deficit Financing, Democracy Now, Affiliates)

In addition, Pacifica management should provide a timetable indicating when this information should become available.

Each area of the Information Request is now discussed in turn.

1. Balance Sheet and Income Statements for YE 9/30/01 and Roll-Forward to 3/31/02

Board and Listeners

• Audited income statements and balance sheets: For the fiscal year ended 9/30/01 for each station and "national" separately.
• Roll-Forward to 3/31/02 (or 6/30/02, if possible, in July): Estimated income statements for the 6 months ended 3/31/02, and balance sheets as of 3/31/02 for each station and for National. This should clearly identify the outstanding debt acquired from past management (for each station and National) and how much revenue has been applied to pay down debt and interest on debt.

  Note: Some basic internal consistency checks should be done on these estimates before they are released, such as - "Does the movement in the estimated balance sheet (i.e. change in (Assets - Liabilities)) tie to the net income in the estimated income statement

• " These checks were not performed for the recent roll-forward to 12/31/2001 contained in the February 5, 2002 letter from accountants, resulting in there being a $0.6 million discrepancy between balance sheet movements and net income over the quarter 10/01/01-12/31/01. This casts serious doubt over the reliability of these estimates, and also makes it clear that the Board and Management are not performing basic checks themselves on the numbers they are getting. Even though they are estimates, the numbers should be internally consistent.
• Summary Graphs and Charts: Many of the board members and listeners are not sophisticated readers of financial information and there is a danger that such information will get ignored or misunderstood by many people. It is critical that listeners understand how their money is being applied and I would say that the most contentious issue here is - What funds are being applied to pay down accumulated debt (station and national)? The two charts I recommend would look something like this (preferably for each station and for national).

Chart 2: Revenue and Outgo Pie Charts

Note: This sort of reporting should be done each year at least and probably more frequently during the current "financial crisis" and uncertainty.

2. Operating Plan, Projected Balance Sheet and Income Statement for YE 9/30/02 (or CY 2002)

Board

• Operating Plan for each station and for National projecting revenue and expense items over the next year, including expected debt servicing (shown as a separate item) on all outstanding debt. Operating plan needs to be based on current station and National circumstances, including staffing levels, debt levels, collection-to- pledge ratios and the change in relationship with Democracy Now.
• Cashflow analysis: Board should have some idea of what cash balance each station is trying to maintain and should set some threshold level that triggers some notice to the Board, so that any looming liquidity crisis can be averted. A periodic cashflow report should also be prepared for this purpose.

The two Charts mentioned above should be prepared for both the board and listeners for the coming year, namely:

• Chart 1: Projected Debt Path from Current to where debt is projected to be at year- end for each station and for national.
• Chart 2: Revenue and Outgo Pie Charts showing where projected revenue will come from and where it will be spent for each station and National.

Board

The board should request from each station a listing of all outstanding debts and an annual payment plan to meet these debts, including prioritization of debts. This plan should be incorporated into Item 2 above, i.e. the Operating Plan for the coming year.

Listeners

Listeners of each station should be given access to a summary report of this plan.

4. Plan for Paying off National Debt

Board

The Board should approve of any plan to pay off Pacifica's major creditors, from the Settlement Plan to the means of financing such settlement. If the settlement financing includes the use of private placement bonds then the Board should be informed of, and approve of, the Bondholders and the terms of the Bonds, including:

• Interest rate: Rate(s), Floating or Fixed?
• Schedule of Principle Repayments
• Assets backing such bonds
• Any other claims the bondholders may have on Pacifica

Listeners

Listeners need a summary of these plans and arrangements to pay off the National Debt. Extra information should be provided where regular listener funds will be used for this, and also where creditors may have claims on Pacifica assets.

5. Other Significant Issues

1. Station Deficit Financing. Where a station projects a deficit in their operating plan for the coming year it is very important to decide up front how this deficit will be financed. Will it be financed by surpluses from another station? Will it be financed by additional debt and, if so, how?
2. Democracy Now. Independence of Democracy Now is potentially a significant issue on both the revenue and expense side, and in terms of listener and affiliate relations. The following needs to be made clear:

• How will this effect fundraising revenues?
• How will this effect Affiliate Fees. Since DN is only national show, who will hold the primary fiscal relationship with affiliates, Pacifica or DN?
• What will be the financial relationship between Pacifica and DN, the impact on archives, and so forth?
• The move of DN from the Pacifica umbrella sends a confusing message to the public. Listeners should be provided with enough information to better understand the reasons for, and implications of, this move as soon as any announcements are made, to avoid unnecessary misunderstandings.