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Orange County Alcoholic Beverage Control Board <br />■ Revenue by Category: (Attachment `B" — Graph). This graph <br />depicts the types of sales and related increases; non - operating (such as <br />interest) is listed but is not significant enough to appear on the graph). <br />• Sales are normally broken down between retail customers and <br />ABC permittees (often referred to as "Mixed Beverage" or <br />"Liquor -By- The - Drink" customers). <br />• Sales increased substantially for the period presented but have <br />slowed over recent years. <br />■ Breakdown of Sales Dollars: (Attachment "C" — Graph). This graph <br />depicts how sales dollars are allocated: Taxes, Cost -of -Sales and Gross <br />Profit. "Sales" minus "Taxes" and "Cost -of- Sales" equals "Gross <br />Profit ". All three categories have been consistent for several years. The <br />tax portion increased in FY09 /10 because of the increase State excise <br />tax from 25% to 30% effective September 1, 2009. <br />■ Breakdown of Gross Profit Dollars: (Attachment "D" — Graph). <br />Gross Profit refers to the funds left, after paying taxes and cost -of- <br />sales; gross profit dollars are used for: <br />• Operating expenses. <br />• Distributions (Alcohol Law Enforcement, Alcohol <br />Education and Orange County General Fund). <br />• Net Income after Distributions which is re- invested in <br />the ABC system (purchase equipment, real estate, etc.). <br />■ Breakdown of Operating Expenses: (Attachment "E" — Graph). The <br />"Pay and Related" category is obviously the greatest percentage of <br />Operating Expenses. The ABC system is labor intensive; pay and <br />benefits are sensitive issues for Board members and employees alike. <br />■ Non - Operating Income (primarily Interest Income) is added to <br />Operating Income to provide "Net Income Before Distributions ". This <br />is a one -line entry on Attachment "A ". A graph is not provided. <br />■ Distributions: (Attachment "F" — Graph). Although distributions to <br />the General Fund have remained fairly consistent for several years, <br />payments to other County- related beneficiaries have increased <br />substantially. FY09 /10 was a very challenging year with economic <br />issues and an increase in State excise taxes. <br />■ Distributions Plus Retiree Health Insurance Expenses: (Attachment <br />"G" — Graph). In earlier years, the BOCC and the ABC Board <br />resolved to reduce the distribution to the County by subtracting Retiree <br />Health Insurance Expenses; however, this is not depicted as such on <br />the financial statements because it is a non -cash transaction. This <br />Page 5 of 6 pages <br />