RANGERS FOOTBALL CLUB

The Rangers Football Club plc

Phone: 0141 580 8782

Fax: 0141 580 8594

email: Ken_Olverman@rangers.co.uk


Memorandum

To: Board of Directors
From: Kenneth Olverman
Date: 15 June 2011
Subject: May Management Accounts

Please find attached the May Management Accounts. The following reports have been defined and are
included. The shaded area reports have been excluded to allow increased focus on top line numbers. These
reports are available on request. As with the introduction of the Executive Summary, monthly cash flows
and KPIs, the Management Accounts will continue to evolve to focus on the more salient issues.

Report Level Definition
Executive
Summary
Executive summary and Management Report
Annual Cashflow Summary Cashflow Projections for 2010/11
Monthly cashflow Monthly Cashflow Projections for 2010/11
Summary Profit &
Loss
1 Profit and loss for the whole Club, similar to statutory format
as against revised Forecast
Summary Profit &
Loss
1 Profit and loss for the whole Club, similar to statutory format
as against original Budget
Summary Profit &
Loss by Group
2 Summary Profit & Loss for the five business groups within the
club down to Trading Profit
Group Summary
Profit & Loss
3 Summary Profit and Loss for each of the business groups
within the Club
Detailed Trading
Account
4 Full Trading account looking across all business groups of the
club. This ties back into each of the levels above at the trading
contribution line/report total
Match
Contribution
5 Net profit/costs per tournament by match for each of the match
related business activities (profit/cost centres)

Balance Sheet Group Balance Sheet showing movements for month and year
to date.
Cashflow Group Cashflow and net debt


Executive Summary

20010/11 Headline Figures m:
May Budget Revised Forecast
Turnover 50.7 57.3
Player Salaries excluding Bonuses 16.0 17.9
Exceptional Tax & Interest Charges - 2.8
Profit for the year 3.0 2.7
Bank Debt/(Cash) at 30 June 2011 20.9 (5.5)
Total Debt at 30 June 2011 25.2 17.7

The major features impacting the results in May were the securing of the SPL title and the purchase by
The Rangers FC Group Limited TRFCGL of 85.3% of the Clubs Issued Share Capital.

Winning the title had an overall reduction on the expected outcome for the season of 1.3m, with
Management and Players bonuses being set off against additional media income from the SPL.

The purchase of the Majority shareholding by TRFCGL resulted in repayment of all borrowings due to
Lloyds Banking Group. There is now no credit facility available and funding will be provided by the
majority shareholder. At the end of May 18.6m had been provided and with the inflow from next seasons
renewals and the stretching of creditor balances, the cash balance at the end of the month was 4.3m. At
the time of writing, season ticket renewals are on a par with renewals at this point in the cycle last season at
approx 33,500, though the waiting list clearing exercise has started earlier this year which may have a slight
bearing on the current figures.

The results include a provision for a tax liability of 2.8m relating to the Discounted Option Scheme
associated with player contributions between 1999 and 2003. The estimated cash figures as at 30 June 2011
assume that any settlement will take place post the year end. Discussions are ongoing with HMRC with
regard to settlement of this debt.

Legal papers have been received from Rapid Vienna requesting that that the club place 2.2m on deposit to
cover the outstanding transfer balance on Nikica Jelavic, This was agreed to as part of the overall transfer
agreement. These papers are presently being considered by the clubs legal advisors.

An impairment review will be undertaken prior to finalising the full year results, and in light of the
introduction of the UEFA financial breakeven analysis from 2011/12. There will be particular focus on the
carrying value of James Beattie. Taking a full write down of the residual value of his two year contract
would result in an additional player amortisation charge of 935K. It should be noted that this charge
would not have any cash implications.
The impairment review will also cover the 648K carrying value of the Goodwill on Acquisition of
Rangers.co.uk in light of the continuing cash losses in this area of the business.

A full reconciliation of the movements in cashflow against budget are detailed below. It should be noted that
the closing bank figure includes the enhanced UCL pool money resulting from the non participation of
Celtic in the Group Stages. Hedging has been put in place for the June receipt of Euros 5m at 1.1565. UEFA
have confirmed that the sums due on 10
th
June will be 5.1m Euro.

Following repayment of the Term Loan and Overdraft balance on 6 May, Lloyds informed the Club that all
bank accounts had to remain in credit. Lloyds have also intimated that they will withdraw our Bacs facility
at the end of June. Discussions are ongoing with Clydesdale to provide an alternate banking solution. It
should be noted that the interest rate swap on 15m of the Lloyds Term Loan remains in place at a
quarterly charge of 145K.

Following the acquisition by TRFCGL, the status and requirement for Rangers Matchday Services Limited
is being reviewed. This subsidiary was set up to receive the 2011/12 ticketing and hospitality income
directly into two new bank accounts.

Following our successful conclusion to the SPL season and settlement of the clubs ownership, the initial
drafts of the season 2011/12 budgets are being revised upwards and a new possible scenario covering UCL
participation is being prepared. These revisions, including a cash profile will be available for review towards
the end of June.

KPI's at May 2011

Year to Date Prior Year to
Date
Forecast Full
Year
Prior Full
Year
Number of Season Tickets
37599 40309 37599
40309
Season Ticket Sales Value
12,317k 13,604k 12,317k
13,635k
Average Season Ticket Price (Net)
328 338 328
338



Total Ticket Revenue
21,399k 20,751k 21,399k
20,741k
Average match attendance
42296 43746
43746
Average revenue Per Ticket (Net)
18.07 18.24
18.24
Occupancy Yield
83% 86%
86%



Hospitality Occupancy
25656 24870
24870
As a Percentage of Capacity
74% 78%
77%
Hospitality Revenue
4,358k 4,342k 4,358k
4,350k
Average Hospitality price (Net)
169.86 174.59
174.91



Turnover (including Revenue Grant)
56,833k 56,011k 57,319k
56,669k



Players & Mgt, Salaries and Benefits
22,056k 21,079k 23,310k
22,213k
Player Pool Salaries /Total Turnover
39% 38% 41%
39%



Total Salaries & Benefits
27,536k 26,580k 29,417k
28,232k
Total Salaries/Total Turnover
48% 47% 51%
50%



Net Profit/(loss)
5,086k 6,305k 2,670k
4,209k
Net Profit (loss) / Total Turnover
9% 11% 5%
7%



Net Player Acquisitions
1,492k -2,469k 1,384k
-2,462k
Football Player Payables
4,177k 1,042k 3,933k
1,259k
Football Player Receivables
3,052k 1,686k 3,023k
1,539k
Net Football Creditor/(Debtor)
1,125k 644k 910k
-280k



Bank Debt/(Cash)
-4,329k 29,534k -5,469k
22,347k
Net Debt
18,553k 34,261k 17,710k
27,074k
Bank Facility Headroom
n/a 4,466k n/a
11,653k



Position in SPL
1st 1st 1st
1st

Management Accounts Highlights

There were three SPL fixtures in the period with two at home.

Turnover at 3,184K is ahead of forecast by 257K for the period.

There was a trading loss of 3,541K for the period which was 287K better than forecast.

The net loss for the period before tax at 3,825K was better than forecast by 290K.

Net profit for the full year has been forecast at 2,671K which is 343K behind budget. There are
potentially a further 1,583K of cost adjustments which would bring the full year forecast outcome down to
1,088K.

Payments due on player acquisitions and disposals were 4,177K and 3,052K respectively.

Closing net debt at the end of May was 18,553K, including RFCGL debt of 18,622K and Cash in Bank
of 4329K.

Reforecast for the year

There were a number of movements in the expected outcome for the full year during the period. The total
movement in forecast profit for the month was a decrease of 1,141K to an expected outcome of 2,671K.

Beyond this figure there are other potential adjustments for Impairment of the residual balance on Beattie
(935K) and Goodwill on Acquisition of Rangers.co.uk ((648K) which would yield a final outcome for the
year of 1,088K if processed.

A full reconciliation is detailed below, the major items being:

A total cost of 1,766K relating to Player and Management bonuses for winning the SPL. A
provision of 200K for finishing 2
nd
in the SPL had been included in previous forecasts.
Additional Media income distributed by the SPL of 240K, being incremental revenue for winning
the SPL over second place.
Increased contribution from Ticketing and Hospitality of 281K and 148K respectively due to
the high demand during the title conclusion.
Remuneration Trust fees of 223K raised by MIH as a catch up on billing and reflecting Tribunal
Costs incurred by the Trustees.
A net trading variance across the business of 203K has now been included in the expected results.

.

Football Group

Comprises :
Football Management
First Team
Scouting
Murray Park
Sports Medicine
Football In the Community
RYD

The total cost of running the football group at 4,616K was on forecast for the period.

First Team at 3,868K was on forecast for the period. Matchday costs were 37K higher than expected
due to higher than accrued European Costs on final billing and more use of pre match hotels towards the
end of the season. Salaries and Benefits were 21K better than forecast. Total SPL win bonuses were
1,535K. It should be noted that there was no withholding of a conditional amount dependant on
qualification for next seasons UCL. Remuneration Trust Fees of 259K were billed representing a catch
up on the last 18 months contributions and costs incurred by the Trust in supporting the RT Tribunal.
First Team is ahead of forecast by 91K at 19,952K for the full year to date. The forecast total for player
salaries and benefits (excluding bonuses) for the first team squad is 17.9m.

Football management at 599K was on forecast for the period. Management bonuses for winning the SPL
were 278K. Overall football management is behind forecast by 26K for the year to date at 5,292K.

Murray Park at 67K was behind forecast for the period by 8K due to high pitch refurbishment costs of
42K set off against lower Maintenance and other overheads. Murray Park at 560K is 34K better than
forecast for the year to date.

Football in the Community was 2K behind forecast. This was due to higher than forecast direct staff costs,
however, the additional cost may be charged out to Grant Assisted projects next period.

RYD at 48K was behind forecast by 7K mainly due to higher travel and football tournament costs of
9K. Year to date RYD is behind forecast by 47K at 582K mainly due to increased payroll of 32K and
travel/tournaments of 47K.

All other areas of the Football Group were on or close to forecast for the period. Overall the Football Group
at 26,856K is ahead of forecast by 85K for the full year to date.

Operations Group

Comprises :
Matchday Catering
Hospitality
Events
Tours

The Operations group contribution at 214K was 32K ahead of forecast for the period.

Hospitality contribution was 24K ahead of forecast. Combined income from Hearts and Dundee United
was 26K short of forecast due to lower than expected occupancy, as a result catering costs for these
matches saw a 17K saving. Catering costs saw a further saving as Celtic costs came in 10K lower than
had been accrued. In other areas due to a conscious cost reduction effort the Sponsors Dinner costs are
anticipated to be 17K below forecast, while administration costs reported a 5K saving.

Events contribution was 8K above forecast. The Play on the Pitch event made a contribution of 6K.
This is a recent addition to the calendar of events and had not been included in the forecast. Also during the
period there was an amendment to the PSV away trip income resulting in further income of 3K.

Commercial Group

Comprises :
Study Support
Sponsorship
Licensing
Rent & Other Income
Gambling & Gaming
Commercial Media
Trackside
JJB
Internet Media (Rangers.co.uk)
Brand Protection

The commercial group contribution at 880K was 190K ahead of forecast for the period.

Sponsorship contribution was 7K short of forecast since MBNA commission did not reach expected level.

JJB revenue for the period was 371K, which consists of 250K from the guaranteed minimum payment of
3m per annum plus the release of the initial royalty of 121K.

Trackside contribution was 12K short of forecast as a result of additional digiboard minutes purchased
from ADI, there should be income to cover this in a future period.

The teams successful retention of the SPL title resulted in 240K of additional income in Commercial
Media, however, there was a 64K shortfall in overall European revenue as our share of the central fees
from the Europa League were lower than expected.

All other areas were close to forecast.

Ticketing and Marketing Group

Comprises :

Ticketing
Supporter Services
OYSC
Travel Club
Database
WWSA
Assembly
Central Marketing
Press Office

The Ticketing and Marketing group contribution of 1,429K was 126K ahead of forecast for the period.

Season Ticket income was 9K above forecast due to higher than anticipated sales from the 75% off
campaign. Within SPL ticket sales both Hearts and Dundee Utd came in above forecast by 12K and 89K
respectively, this was due to the competitive title run in. Administration fee income came in 11K above
forecast.

Ticket marketing costs came in 10K below forecast, this was largely due to the competitive title race
together with a continued focus on spend.

Ticket Operations were 7K higher than forecast partly due to increased costs associated with the
additional administration fees reported above.

Marketing costs were 9K higher than forecast due to an additional charge in respect of the 2010/11
Kemsley account management service.

Press Office were 7K below forecast due to the release of an accrual for the Ibrox Disaster
Commemoration which is no longer required.

Other areas within the group were on or close to forecast.

Support Group

Comprises :
IT/Systems
Facilities
Matchday Operation & Security
Health & Safety

The total cost of the support group at 397K was 98K behind forecast for the period.

Facilities, at 202K, was 42K behind forecast. Main reason for this overspend was the refurbishment
costs of the pitch at the end of the season. Year to date Facilities at 2,014K is behind forecast by 141K,
primarily relating to pitch repairs, general repairs and maintenance, and cleaning expenses.

Matchday Operations at 135K was 30K behind forecast for the period due to higher than expected costs
relating to Policing and Stewarding (12K) and recognizing the residual costs of European site visits which
had only been partially passed on to Strathclyde Police. Year to date this cost centre is 48K behind
forecast at 1,536K

All other units were on or close to forecast for the period. Year to date Support is 174K behind forecast at
a total cost of 4,128K.

Finance, HR, Clubwide & Exec Group

Comprises :
Finance (incl rates, insurance, MIH management charge etc)
Human Resources
Executive
Clubwide Expenses

The cost of this administration based group at 345K was ahead of forecast by 17K.

Executive at 93K was ahead of forecast for the period by 10K due to delays in recruitment. Overall
executive is 70K better than forecast for the year to date, again primarily due to delays in recruitment.

Finance at 216K was on forecast for the period after adjustment to cover the costs of MCR Consulting by
84K for the period and 160K for the year.

All other units were on or close to forecast for the period. Overall year to date Finance at 2,846K is
126K better than forecast.

Summary

The net loss for the period at 3,825K was better than forecast by 290K.

The total trading loss for the period at 3541K was 287K better than forecast.

Fixed asset Depreciation was 165K for the period.

Player Amortisation charge was 705K for the period.

Interest costs were 93K, with 30K being released from the forecast, reflecting the improved cash
position and repayment of the term loan with no replacement interest charge. There was a charge of 50K
during the month to cover the interest accruing on the 15m Term Loan Interest Rate Swap which has
been retained.

No tax charge or credit has been included in the results.

Cash Flow

Due to the takeover, all cash debts due to Lloyds were repaid on the 6th May. At the end of May net debt
consisted of cash at bank 4,329, finance leases 3,810K, TRFCGL loans 18,622K and other loans of
450K. The balance outstanding to Ticketus at the end of May was 814K with 949K having been
repaid in the month. The total value of these advances will be repaid before the June 2011 year end.

The final installment of Euros 5,094K was received from UEFA on the 10th June. A hedge at a rate of
1.1565 has been placed on 5m of this receipt.

Attached is a reconciliation of the original bank Budget cashflow to the Forecast cashflow after making the
changes discussed in the expected outcomes section above. The significant movements during the month are
detailed in the reforecast section of this report with the profit and loss effect all expected to match with cash
movements.

Capital expenditure has been delayed with the total spend for the year now forecast at 400K, relating
primarily to replacement of the PA system.

Season tickets sales for next season are currently reported at 11.3m with approximately 7.9m due to be
received prior to the year end.

Closing forecast bank cash is 5.5m with receipts from RFCGL 18.9m to cover term loan repayment and
CAPX at 19m

Player Payables and Receivables

Movement in the player pool during the season is detailed below. There were no cash movements during
the month. The payables balance includes solidarity provisions of circa 400K which may never be claimed
although the provisions will be retained until the position becomes clear. Closing payments payable and
receivable on player transfers were 4,177K and 3,052K respectively.

Player Acquistions

Player Payables
Brought forward
Movements
During Year
Paid During Year Balance Payable
'000 '000 '000 '000
Buffel 56 56
Khizanishivili 20 20
Clement 50 50
Novo 20 20
Papac 20 20
Webster 63 -50 13
Wittaker 49 -21 28
Beasley 34 34
Thompson 5 5
Broadfoot 210 -90 120
McCulloch 39 39
Cuellar 72 72
Alexander 18 -5 13
Miller 71 -51 20
Lafferty 5 5
Weir 10 -5 5
Velicka 90 -50 40
Davis 182 -88 94
Edu 52 -26 26
Mendes 12 -13 -1
Fleck 50 50
Bougherra 125 125
Beatie 1870 -955 915
Weiss 545 -516 29
Thomson K 70 -70
Kerkar 2 -2
Healy 2 2
Ness 5 5
Little 5 -5
Diouf 55 -55
Bartley 22 -20 2
Jelavic 3688 -1528 2160
Exchange 27 183 210
1260 6417 -3500 4177
Player Disposals

Player Receivables
Brought forward
Movement
During Year
Received During
Year
Balance
Receiveable
'000 '000 '000 '000
Ferguson B 644 100 -744
Mendes P 961 -524 437
Miller K 338 -338
Wilson 2500 -1000 1500
Thomson 1915 -806 1109
Exchanges -66 72 6
1539 4925 -3412 3052
Other Matters

Tax

a) Discounted Option Scheme
A meeting took place with HMRC on 11 May. The meeting was attended by Donald McIntyre and Stephen
Clancy and David Grier of MCR. HMRC will not allow the position of the 2.8m to drift, and may consider
the penalty position if this was to occur. A payment to account would be taken into consideration in
assessing the level of penalty loading. The desire from MCRs point of view is to wrap the DOS and the
Remuneration Trust settlement into one.

b) Murray Group Management Limited Remuneration Trust
Opinion was provided by Counsel on the 22 February 2011 on the state of the case so far. His conclusion at
this stage is that there are very definitely reasonable prospects of success. The Tribunal is due to reconvene
in November 2011, with a decision expected 8 12 weeks thereafter. If the case goes against the Club there
would then follow a period to discuss the affordability of any settlement.
Bryan Jackson of PKF has been appointed to advise the Board on wrongful trading provisions under the
Insolvency Act 1986.

c) Tax tender
Following the tax tender process, Ernst & Young have been earmarked for appointment as the Clubs
advisers. This is currently under consideration by the Clubs majority shareholder.

Bank Facility

A new subsidiary, Rangers Matchday Services Limited, following advice from Grant Thornton and Dickson
Minto, has been set up to receive the 2011/12 ticketing and hospitality income directly into two new bank
accounts. A legal agreement between Rangers Football Club plc and the new entity had been passed to
Lloyds Banking Group for approve in order to carve the funds out of the exiting security arrangement and
protect corporate and season ticket holders. Confirmation is awaited from the majority shareholder on how
protection will now be achieved, as working capital levels have necessitated drawing down season ticket
income funds to pay existing creditors.

G51

Discussion took place with Glasgow City Council on 4 May. GCC wish to review the workings of the
overall deficit of 40m in pursuing their preferred option of a business park, and revert back on 6 June.
These figures have been with the Council since November 2010. It is hoped that a meeting can be arranged
with the Leader of the Council to again demonstrate that retail is the only viable option.

2011/12 Budget

The 2011/12 initial Budget will be revisited and updated to take account of the change to Champions
League qualification and ticket income. Player salary levels and investment have still to be agreed and
incorporated.

Market Capitalisation

As at 19 May, the share price was 32.5p, resulting in a market capitalisation of 35.4m.