1. Treasurer’s Report to Council - Membership Information Session -
CD #13.0
Midwinter Meeting
Treasurer’s Report to Council - Membership Information Session -
FY 2017 year-end Financial Results to
ALA Council, Executive Board, Membership
and
The Planning and Budget Assembly
Saturday - February 11, 2018
Sunday – February 12, 2018
Denver, Co.
Presented by:
Susan Hildreth – ALA Treasurer

2. How Did We Do? - Total ALA -
FY 2017, FY 2016 and FY 2015
2017
2016
2015
Revenues
$ 48,808,627
$ 51,897,784
$ 51,679,590
Expenses
$ 50,946,547
$ 51,365,949
$ 51,364,646
Net Operating Revenue(Expenses)
$( 2,137,920)
$ ,835
$ ,944
Total ALA revenues were $48.8 million compared to the budget of $50.1 million and $51.1 million in 2016 ($2.3 million reduction).
Total ALA expenses were $51.0 million compared to the budget of $51.9 million and $51.4 million last year ($419,402 reduction).
We had anticipated a net expense of $1.9 million. Increase in net expense is less that 1% of revenue
Budget results are not favorable but much closer to projections than in previous years
Revenues not keeping pace with expenses even though expenses overall are down
Not a sustainable path Mention 3 year comparisons

3. Where Did Our Revenue Come From?
ALA’s primary revenue sources continue to be:
Publishing – 34%
Meetings & Conferences – 24%
Dues – 16%
Grants – 13% (unpredictable)
Major revenue sources are at best stable and in actuality most are declining.
Best news is that donations are increasing!
Where Did Our Revenue Come From?

4. General Fund Summary 2017 2016 2015 Revenues $ 27,669,658 $ 27,305,345
2017
2016
2015
Revenues
$ 27,669,658
$ 27,305,345
$ 29,024,423
Expenses
$ 29,002,985
$ 27,972,577
$ 28,745,049
Net Revenue
$ (1,333,327)
$ (667,232)
$ ,374
General fund does NOT include divisions and roundtables
Revenues were higher than FY 2016 actuals but were $1.9 million less that was budgeted
Expenses were about $500,000 less that the $29.5 million that was budgeted which helped to reduce the net expense
General fund had a net operating loss of $1.3 million
Note FY 2017 was a one-conference and was expected to result in a net loss

5. General Fund Revenues 2017 2016 2015 Dues $ 5,363,955 $ 5,592,444
2017
2016
2015
Dues
$ 5,363,955
$ 5,592,444
$ 5,480,185
Publishing
$ 11,491,870
$ 12,167,044
$ 12,978,793
Meetings & Conferences
$ 7,960,980
$ 7,047,615
$ 7,783,575
Interest & Dividends
$ 1,333,533
$ 1,168,625
$ 1,087,785
Contributions
$ ,089
$ ,020
$ ,228
Miscellaneous
$ 1,306,303
$ 1,139,597
$ 1,455,857
 Total
$ 27,669,658
$ 27,305,345
$ 29,024,423
Membership dues down by 4% - higher retirement rates and lower organizational members
Publishing continues to have challenges. Missed FY 17 budget projection by $1.4 million. Has new leadership; developed more realistic FY 18 projections
Meetings and conferences - Combined net revenue for Midwinter and Annual exceeded budget by $22,00. Reconfiguring both conferences
Grants & Awards – challenge to predict as can vary significantly from year to year

6. General Fund Expenses 2017 2016 2015 Payroll $ 15,172,577 $ 14,323,038
2017
2016
2015
Payroll
$ 15,172,577
$ 14,323,038
$ 13,941,468
Outside Services
$ ,342,135
$ ,312,669
$ 4,109,241
Travel
$ ,004,247
$ ,073,904
$ ,076
Meetings & Conferences
$ ,830,480
$ ,896,371
$ 4,044,220
Publications
$ ,079,003
$ ,261,921
$ 2,379,129
Operating & Overhead
$ ,324,084
$ ,744,278
$ 2,406,458
Interunit Transfers
$ ,459
$ ,396
$ ,790
Total Expenses
$ 29,002,985
$ 27,972,577
$ 28,255,382
Detailed look at General fund expenses
Note again that expenses were $500,000 less than budgeted. Reduction of expenses to offset lower than anticipated revenue is not a sustainable funding approach and reduces capacity to provide services. Also expenses must be aligned with realistic revenue projections as well as identifying additional revenue sources

7. General Fund Net Revenue Sources – 2017 - and other support -
Overhead
Total
Revenues
Support
Interest & Earnings
$ ,333,533 $
$ 1,333,533
Membership Dues - Net
$ ,363,955
$ 5,363,955
Publishing - Net
$ ,990
$ 2,909,300
$ ,290
Meetings & Conferences - Net
$ ,015
$ 2,482,732
$ 3,234,747
Other
$ ,489
$ 2,080,969*
$ 2,693,458
$ ,814,982
$ 7,473,001
$ 16,014,983
More information on General Fund Revenue Sources
Publishing, meetings and conferences, divisions and roundtables contribute OH that funds critical activities of ALA units
Note that $7.5 million in OH was contributed - $3M from publishing, $2.5M from conferences and $2M from divisions and roundtables
OH rate in FY 17 was 26.4% and that will be continued in FY Application of OH rate varies depending on the category of funds.
*Overhead contribution from Divisions, Roundtables and Grants

8. Publishing Revenues & Expenses – 2017
Overhead
Net
Revenues
Expenses
Contribution
Revenue
ALA Editions
$ ,646,320
$ ,240,649
$ ,543
$ (594,329)
Booklist
$ ,760,677
$ ,792,156
$ ,236,819
$ ,521
Graphics
$ ,649
$ ,301
$ ,094
$ (69,652)
Digital Resources
$ ,188,547
$ ,143,957
$ ,087
$ ,590
American Libraries
$ ,513
$ ,513
$ ,038 $
E-Learning
$ ,261
$ ,817
$ ,921
Publishing - AED
$ (76,416) $
Total
$ 11,025,967
$ 10,545,977
$ 2,909,300
$ ,714
ALA editions softness in market, internal operational challenges, planned titles not ready for publication
Booklist –stable but seeing declines, move from print to online, booklist being creative in re-packaging products
New leadership Mary MacKay working with empowered management since June 2017 strategically reduced budget projections and hopes to meet or beat those projections in FY 18

9. Meetings & Conferences Revenues and Expenses - 2017
Overhead
Net
Revenues
Expenses
Contribution*
Revenue
Annual Conference
$ 6,660,599
$ 5,828,583
$ 1,758,398
$ ,016
Midwinter Meeting
$ 2,743,689
$ 2,823,690
$ ,334
$ (80,001)
Total
$ 8,349,976
$ 8,304,105
$ 2,482,732
$ 752,015
*Overhead contributed to the General Fund
It is always about location for conferences!
Mid-winter in Atlanta was very close to its budget , including OH
Annual in Chicago - which is one of the most profitable conference locations - was strong but we see it stabilizing and not producing as much as in the past.
Reconfiguration of both midwinter and annual are critical to continued relevance and success of these events.

10. Division Revenues and Expenses– 2017
2017 was a spend down year in preparations for 2 division conferences in FY18, so net expense was anticipated
Actual net expenses were very consistent with other 1 division conference years.

11. Roundtable Revenues and Expenses– 2017
Not huge amounts of money but doing very well
Controlled expenses in all units.

12. Total ALA Assets, Liabilities & Net Assets – 2017
2017
2016
2015
Assets
$ 72,513,440
$ 75,727,502
$ 77,572,339
Liabilities
$ 32,622,113
$ 45,343,837
$ 46,034,318
Net Assets
$ 39,891,327
$ 30,383,665
$ 31,538,021
Very complicated topic but we remain in a solid financial position.
Our assets decreased but so did our liabilities which increased our net assets by $9.5 million
Asset position was impacted by requirement for cash to cover operating needs which was offset by an increase in value of endowment. Note that total assets include the ALA endowment valued at about $46 million
Liabilities were reduced due to reduction in Post-retirement liability which relates to separating retirees from current employees. All benefits were retained by our current and former employees but this action was significant as it reduced this liability by over $10 million

13. Preparing for FY19 and Beyond

14. Strategy to Address FY 19 and Beyond
Leverage strong balance sheet to fund investments that will generate revenue and reduce operating expenses
Endowment loan
ALA line of credit
Bank debt supported by value of buildings/other assets

15. Strategy to Address for FY 19 and Beyond
Consider the best use of the ALA Headquarters
Commission analysis of best use of building
Consider how to provide most efficient and modern staff work environment
Take advantage of all opportunities to streamline the organization and workflow
New Business Development Committee revitalized

16. Thank you for your support