SAE Annual Report 2012 - 20

The Financial Message
To all SAE International Members:
We are pleased to present the SAE 2012 audited
financial statements for your information and
review. The accompanying reports are: the
Independent Auditor's Report, Consolidated
Statements of Financial Position, Consolidated
Statements of Activities and Changes in Net
Assets, Consolidated Statements of Cash Flows,
and Consolidated 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. In March 2012, SAE purchased ABP
International, Inc. d/b/a Tech Briefs Media Group
(TBMG). The results of TBMG's operations, since
the purchase date, have been included in the
accompanying financial statements.
The Consolidated Statements of Financial Position
reflect total assets of $78.6 million at the end
of 2012, an increase of $11.0 million over 2011,
primarily due to the addition of TBMG. They show
SAE is financially sound and well positioned to
provide strong support for member service activities
in the future and realization of the Long-Range
Strategic Roadmap.
In 2012, the Consolidated Statements of Activities
and Changes in Net Assets reflect SAE operating
revenues of $67.2 million and a net gain from
operations of $3.4 million. Operating revenue
and net margin both exceeded SAE's Financial
Management Policy targets. Substantial revenue
growth resulted from the addition of TBMG,
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increased sales and marketing efforts, continued
focus on new products and global expansion, and
improvements in economic conditions.
In non-operating activities, SAE spent $0.6 million
on acquisition activities, $0.4 million in interest and
taxes, and had a non-cash pension adjustment of
$8.0 million. These charges were partially offset by
the General Investment Fund which finished with a
net increase of $3.5 million, due primarily to increases
in the market value of long-term investments. This
resulted in a non-operating loss of $5.5 million.
Although SAE posted significant operating results
during 2012, net assets decreased $2.0 million during
2012 as a result of the non-operating losses noted
above. The decrease in net assets for the year of
$2.0 million, when combined with net assets at the
beginning of the year of $26.2 million, resulted in
$24.2 million of net assets at year-end.
As part of their audit, SAE's auditors reviewed the
organization's internal controls. SAE adheres to
certain practices that strengthen the organization's
internal controls including: budgeting and reporting
to the Finance Committee; Board of Directors and
Audit Committee participation; strong commitment
to integrity, ethical values and competence; and a
conservative approach in management's philosophy
and operating style. Audit procedures did not identify
any deficiencies in internal control that are considered
to be material weaknesses. The management letter
did include recommendations for improvement to
further strengthen SAE's internal controls. These
recommendations will be implemented in 2013.
As a reminder, recall that SAE is tax exempt under
Section 501(c)(3) of the Internal Revenue Code.
SAE Annual Report 2012

Table of Contents for the Digital Edition of SAE Annual Report 2012
