For the past several years the annual operating budget of the Association has been in the $14-$17 million range. The actual FY 2008-2009 operating expenditures was $16,884,635. At the close of the last fiscal year on June 30, 2009, AAPG had a net operating deficit of $261,213. Like so many companies, we felt the economic slow-down in our overall bottom line despite a very successful Denver convention. The struggling economy did not only affect our operations, as we were also required to record $5.76 million reduction to fund balance as a result of falling investment values in both the Association investments and the pension fund.
The current fiscal year (2009-10) which has approved budgetary expenditures of $18.4 Million, is expected to finish with a deficit due to a change the Executive Committee approved for the employee pension plan to provide stability in the cost of the plan to AAPG in the future, a financial disappointment with the Rio ICE. Positive impact in the budget will be seen with the expectation of financially successful conventions in New Orleans and a successful NAPE and APPEX.
For budgetary purposes, activities in Headquarters are divided into two main groups. Essential Services includes Operations/Administration, Membership, BULLETIN and Communications (EXPLORER) which are expected to be largely supported by dues. The second group is Self-Supporting Functions, which includes Special Publications, Education and Convention departments. The “Self-Supporting“ departments are expected to be self-sustaining and generate modest income for the Association; however the Convention department is the only one that has consistently generated income in the past.
We continue to use an overhead allocation program for tracking and applying overhead costs to AAPG departments and subsidiaries. The program assigns direct cost expenses to each department including rent, utilities, insurance, depreciation, and professional and legal fees. A proportion of the dues revenue budget allocations are now being applied to the EXPLORER and BULLETIN, because they are provided to every member.
Highlights of Revenue & Expenses
- Revenue last fiscal year was $1,971,659. In the current year’s budget, dues revenue is projected to be $2,337,615 which includes members under the new group corporate membership. Our full-member fixed dues of $80 per year continue to be an exceptional value, especially when compared to the services AAPG members receive for their dues compared to sister societies.
- Conferences and Meetings:
- Last year’s revenue was $6,376,999. After paying expenses associated with sponsoring these events, a net surplus of $1,191,844 was realized. The Rio (ICE) meeting was negative due to circumstances beyond our control. The Convention staff took extraordinary measures to reduce the spending and increase the income wherever possible. The New Orleans convention appears positive for the current fiscal year with significant support from members, exhibitors and sponsors.
- Advertising Revenue:
- Advertising in the EXPLORER generates the majority of this revenue with a small amount from the BULLETIN and the Web site. Last year’s advertising-generated revenue was $1,990,783. For the current budget, it is estimated at $1,511,132. We hope to hold at these levels despite the economic challenges caused by many supply firms reducing their marketing and recruitment advertising budgets.
- Special Publications:
- Last fiscal year, actual sales were $596,803 which is less than this year’s budget of $777,800. Eight Special Publications are planned for release this year, coupled with an increase in the demand for oil and gas industry information, the department is expected to have a surplus of over $49,374, though the slowdown in discretionary spending will put pressure on that goal.
- The Education Department has been reviewing their offerings to help the department be more cost-effective. The use of innovative content delivery methods is increasing the number of members and non-members who are able to take advantage of the service through web-based training. In 2008-09 the Education Department had a $215,711 loss, but is projected to have a $229,960 surplus in 2009-10.
- Postage and Shipping:
- This category remains a significant budget item. In FY 2008-09, AAPG spent $671,385 on postage and shipping; a decrease of $65,454 from the prior budget year. The budgeted amount for FY 2009-10 is $642,255.
I encourage everyone to take the time to review the “Statement of Income and Expenses“ published in the 2009 Annual Report in the December 2009 issue of the BULLETIN on page 1728. This chart provides a comparison of fiscal years 2007-08 with the results of 2008-09. This can be a helpful way to review AAPG’s financial performance for the past two fiscal years.
In closing, I want to thank the membership for the honor of serving as your Treasurer. This has been another active year which implemented changes that will help AAPG be financially strong in the future.
Special thanks also go to the Executive Committee, the Audit Committee, and the entire AAPG staff for their able assistance. I look forward to a successful FY 2009-10, and hope my years as Treasurer will assist AAPG in continuing the development of financial stability and growth for the future.