ITF

4 Opera ng Expenditure Opera ng expenditure for 2023 was $119.3m (2022: $92.7m), reflec ng inclusion of the full costs of the Davis Cup. Davis Cup par cipa on payments and expenses totalled $58.8m (2022: $22.1) which, along with record levels of data sales payments of $13.9m in 2023 (2022: $11.1m), contributed to a $21.7m increase in major events costs to $81.6m (2022: $59.9m). The ITF con nues to make data sales payments amoun ng to 37% of prize money for $15,000 tournaments and 50% of prize money for all tournaments with a prize fund of $25,000 and above and is ac vely inves ng in the future success of the Tours and Player Pathway through strategic funding for Balanced Calendar Fund grants to support more countries to hold tournaments and upgrade exis ng tournaments to higher prize money levels – see the Strategic Projects sec on for details. Tennis Development opera ng expenditure increased by $1.5m to $12m in 2023 (2022: $10.5m) demonstra ng the ITF's ongoing commitment to deliver programmes to the benefit of na ons at all levels and across the world. Commercial costs decreased by $1.0m in 2023 to $3.0m (2022: $4.0m) primarily because agency fees and commissions on Billie Jean King Cup sponsorship deals are now accounted for within Billie Jean King Cup Ltd. Presiden al and Communica ons department expenditure decreased from $5.7m in 2022 to $5.4m in 2023. The Annual General Mee ng was held in person in Cancun, Mexico with subsidies given to Na onal Associa ons to enable delegates to a end. The Tennis An -Doping Programme is now managed by the Interna onal Tennis Integrity Agency (ITIA). An -doping expenditure of $1.4m (2022: $0.9m) is contained within Integrity, Science and Technical expenditure of $8.5m in 2023 (2022: $3.9m) represen ng the ITF's share of the costs of the programme. Other costs contribu ng to the total include legal fees of $5.0m in the year. Finance and Administra on opera ng costs, including costs of the IT department and IT projects increased from $6.8m in 2022 to $8.1m in 2023 driven by increases in premises, IT project staff and insurance costs. Staff costs, included within each department, amounted to $15.1m in total (2022: $14.8m) an increase of only 1.8% year on year despite the number of employees increasing from 133 to 139. Annual increases are set by the Remunera on Commi ee and approved by the Board. Strategic Projects Strategic projects are directly related to delivering the objec ves of the ITF2024+4 strategy and not considered as ongoing or normal ac vi es. The ITF World Tennis Number is a key project which gives our member Na onal Associa ons the means to iden fy players and grow par cipa on levels, while also providing meaningful ra ngs to recrea onal and professional players alike. Expenditure on the project in 2023 was $1.2m (2022: $1.4m) The Balanced Calendar Fund was approved by the Board in 2021 to provide funding to increase the number, loca ons and prize money of tournaments around the world to ensure fairer access for all players. In 2023 $2.6m funding was provided to member na ons (2022: $1.2m). Inves ng Ac vi es Inves ng income recorded in the Consolidated Income Statement shows gross investment gains of $3.7m (2022: $4.7m loss), a simple posi ve return of 19.4% (2022: net loss $5.0m, nega ve 9.4%). The por olio con nues to be overseen by Cambridge Associates under an advisory mandate and is supervised by the ITF's Investment Advisory Panel which reports to the ITF Finance and Audit Commi ees and ITF Board of Directors on a regular basis. The investment por olio is invested for long-term growth but include strategies for mi ga ng short-term vola lity. This diversified approach foregoes an element of gains in rising markets for less exposure to falling markets, reflected by a slight underperformance to benchmark. Consolidated Statement of Financial Posi on Net Assets of the ITF Group have increased from $40.2m at 31 December 2022 to $43.3m at 31 December 2023. Intangible Assets includes investments in digital transforma on projects amoun ng to $2.7m in 2023 (2022: $2.3m) with addi ons of $1.8m in the year exceeding deprecia on charges of $1.4m. Net Assets for 2023 includes $5.8m Investment in the Billie Jean King Cup joint venture. Details are provided in note 26. Trade and other receivables increased to $57.2m in the year (2022: $29.5m) due to significant sums outstanding for funding of the Davis Cup Finals in November. In addi on, contract assets increased by $7.8m with the accrual of Data Sales income and Davis Cup hos ng city fees at year-end. Report of the Chairman of the Finance Commi ee

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