SAE Annual Report 2009 - 26

SAE International

The Financial Message

To all SAE International Members: We are pleased to present the SAE 2009 audited financial statements for your information and review. The accompanying reports are: the Independent Auditor’s Report, Statements of Financial Position, Statements of Activities and Changes in Net Assets, Statements of Cash Flows, and Notes to Financial Statements. The SAE Foundation is an unincorporated affiliate of SAE and, accordingly, is included in the accompanying financials. The actual accounts of SAE and the SAE Foundation are maintained separately and the respective funds are not comingled. The economic downturn and conditions within the industries SAE serves had a significant impact on SAE during 2009 and are clearly reflected in the 2009 financial results. As discussed later, SAE completed sustainability initiatives during 2009 that should enhance the financial well being of SAE. The Statements of Financial Position reflect total assets of $63.6 million at the end of 2009. The increase in total assets was $2.0 million, or an increase of 3.3% over 2008. The increase was due to gains in nonoperating activities and related to strong performance in the investment markets. We believe you will find the Statements of Financial Position show SAE continues to be financially well positioned to continue to provide strong member service activities in the future.

In 2009, the Statement of Activities and Changes in Net Assets reflect SAE operating revenues of $46.0 million and a net loss from operations of $0.8 million. Both operating revenue and net margin fell short of SAE Financial Management Policy targets. Sustainability initiatives, which included workforce reductions, were completed during 2009 and reduced SAE’s overall cost structure by approximately $18.0 million. This was necessary to align the cost structure with the revenue base and to ensure the future success of SAE. In non-operating activities, SAE invested $2.9 million in new business development activities, also known as strategic investment projects. These projects are supported by returns from the General Investment Fund which finished with a net increase of $7.3 million, due primarily to increases in the market value of our long-term investments. In addition, a non-cash pension adjustment resulted in an increase to net assets of $5.5 million. Strategic investment projects, when combined with long-term investment increases, the pension adjustment, and other miscellaneous items, resulted in a total non-operating gain of $6.5 million. Sustainability initiatives included discontinuing certain operations which resulted in losses of approximately $0.6 million during 2009 but will benefit SAE going forward.

2009 Annual Report

SAE Annual Report 2009

Table of Contents for the Digital Edition of SAE Annual Report 2009