Financials

Treasurer’s FY 2011 Annual Report

Jim Neal
Jim Neal,
ALA Treasurer

At the January 2011 Midwinter Meeting in San Diego, the American Library Association’s (ALA) Executive Board recommended and Council approved the ALA programmatic priorities for the FY 2012 budget year. They were as follows:

  • Diversity
  • Equitable Access to Information and Library Services
  • Education and Lifelong Learning
  • Advocacy for Libraries and the Profession
  • Intellectual Freedom
  • Literacy
  • Organizational Excellence

These priorities constitute the basic framework for the 2015 Strategic Plan—year two—and the operating priorities to be carried out by all the departments, divisions and units of the Association.

The FY 2012 budget recognized that the library profession, particularly public, academic and school libraries, continues to be negatively impacted by a sluggish economy. As we have seen in most of our home institutions, the demand for library services from the public continues to escalate. Additionally, our need to maintain and improve our services to members and the profession continues unabated. In the face of these realities, every effort was made to provide the highest level of service and program offerings as needed by the membership and the public at large.

The American Library Association experienced a very successful programmatic year. The following represents just some of the programmatic highlights during the year:

  • ALTAFF launched its Trustee Academy
  • ALA conferences in Dallas and Anaheim supported ALA programs by generating $834,206 in net revenue
  • Version 2.0 of Resources for College Libraries successfully launched—ACRL and CHOI CE
  • Spectrum reached its fundraising goal of $1.0 million in support of  scholarships
  • The Digital Content Working Group addressed issues related to the impact of e-books and other forms of digital content on libraries of all types.
  • The launch of RDA in the US and international markets
  • Organizational membership realized improved growth
  • ASCLA’s “Springtime in Paris” excursion sold out
  • “Every Child Ready to Read” revenues were very strong—PLA and ALSC
  • ALA held its first “Virtual” conference during the year
  • AASL and PLA conducted successful national conferences
  • Support continued for increased electronic participation by members in Annual Conference and Midwinter Meeting committee activities

FY 2012 Financial Factoids

  • ALA’s net assets improved by $345,458(1.1%) to $30.5 million
  • Neal-Schuman publishing was acquired in December 2011
  • The revenue producing units, Publishing and Meetings & Conferences contributed $763,942 in combined net revenue
  • General Fund dues declined marginally by $58,902 (-1.0%) to $5.8 million.
  • Operationally - Total ALA revenues increased by $3.1 million (6.6%) to $49.6 million, while total ALA expenses increased by $3.3 million (7.1%) to $50.1 million 
  • Division revenue increased by $1.6 million (12.1%) to $15.3 million as a result of successful conferences by AASL and PLA
  • Long-term investment net assets improved by $1.2 million (6.6%) to $34.5 million as a result of  improved market performance
  • ALA Editions realized a 40.1% increase in revenue to $4.9 million due to the additional activities from the Neal Schuman publishing acquisition
  • ALA-APA produced positive net revenue for the third consecutive year

FY 2012 Financial Results

Financial Value Proposition

“To develop and deploy the financial resources that support the strategic plan and delivery of programs that are responsive to member needs and the improvement of library service.”

Summary of Operations—Total ALA (All Funds)

Total Revenues—For FY 2012, ALA generated total revenues of $49.6 million, which is an increase of $3.1 million (6.6%) compared to FY 2011. The biggest increases were in Meetings & Conferences and the Sale of Books and Materials. Revenue from Meetings & Conferences increased during the year by $2.1 million (20.6%) to $12.1 million. This was as a result of having one additional national division conference  during the year. The Sale of Books and Materials increased by $1.2 million (21.2%) to $7.0 million, primarily due to the additional activity resulting from the operations of Neal Schuman Publishing (operations are housed in ALA Editions) which was acquired in December 2011 and incorporated into the ALA Edition operation. Also contributing was Grants & Awards which increased by $398,275 (7.4%) to $5.8 million.

American Library Association  Statement of Operations :Revenues 2012 and 2011: Dues 2012 $8,621,239 ; Dues 2011 $8,656,744; Sale of Books 2012 $6,968,888;Sale of Books 2011 $5,748,024;Subscriptions 2012 $4,438,922;Subscriptions 2011 $4,600,175;Advertising 2012 $5,322,617;Advertising 2011 $5,266,933;Meetings & Conferences 2012 $12,080,405;Meetings & Conferences 2011 $10,021,000;Products & Promotions 2012 $1,288,498;Products & Promotions 2011 $1,271,473;Grants & Awards 2012 $5,750,398;Grants & Awards 2011 $5,352,123;Contributions 2012 $1,189,183;Contributions 2011 $1,449,608;Interest & Dividends 2012 $1,344,857;Interest & Dividends 2011 $1,535,284;Other 2012 $2,631,810;Other 2011 $2,680,257.

Total Expenses—For FY 2012 ALA generated total expenses of $50.4 million, which is an increase of $2.3 million (4.8%) compared to FY 2011. Operating expenses represented the most significant increase at $1.2 million (18.5%) to $7.6 million. This was due primarily to the accounting treatment necessary to recognize the expense related to the amortization of intangible assets ($335,000) for the Neal Schuman acquisition. Certain intangible assets such as trademark, backlist, on-line catalog etc. have a value that extends between three and five years and a portion of the value must be recognized as an expense each year. Professional services were another area where expenses were higher, increasing by $921,069 (13.8%) to $7.8 million primarily due to work related to the imprint acquisition. Other major increases were in Travel ($495,820), Payroll ($434,447) and Publications ($182,370).

ALA Statement of Operations - Expenses: 2012 and 2011Payroll	2012 $21,373,228 ; Payroll	2011 $20,938,781;  	Outside Services	2012 $7,608,159; 2011 $6,687,090 ; 	Travel	2012 $2,227,428; Travel 2011 $1,731,608 	Meetings & Conferences	2012 $6,355,523;Meetings & Conferences	 2011	 $6,258,656 ; 	Publications	2012 $4,934,377; Publications 2011	 $4,752,007 ; 	Operating	2012 $7,554,582; 	Operating 2011 $6,373,855 ; 	Postretirement Benefits	2012 $341,853;Postretirement Benefits 	2011 $1,330,694 ; 	Total	2012 $50,395,150 ;Total 2011	 $48,072,691 ;

Net Revenue—On an operating basis, the result was a net loss of ($758,333), which is improved from the net loss of ($1.5 million) in 2011. By including non-operating revenue of $1.1 million, primarily from investing activities, the net result is a gain of $345,458. As a result, the Association’s net assets increased by 1.1% to $30.5 million.

Statement of Financial Position—Total ALA (All Funds)

Total Assets—For fiscal year 2012 the Association’s total assets increased by $6.5 million (9.3%) to $76.0 million. Most of the increase occurred in two areas: Goodwill ($2.3 million) and Intangible Assets/Net Amortization ($3.9 million) as both were related to the accounting treatment for the Neal Schuman Publishing purchase made during the year (12/11). Other areas realizing significant increases were Long-Term Investments ($1.3 million) related to unrealized gains, Inventory ($603,084) and Accounts Receivable ($444,201) related to increased activities from Neal-Schuman Publishing. The increases were offset by a reduction in Cash & Investments ($1.6 million) as funds were used in the Neal-Schuman Publishing purchase.

ALA Consolidated Statement of Financial Position - Total Assets: 2012 and 2011:Cash & Investments	2012 $16,500,868; Cash & Investments	2011 $18,088,304;  Grants Receivable	2012 $791,457 Grants Receivable	2011 $802,385 ; Inventory	2012 $1,817,155 ;	Inventory 2011 $1,214,071;  Prepaid expenses	2012 $658,632; Prepaid expenses	2011 $659,748  Property and Equipment	2012 $14,171,505; Property and Equipment	2011 $14,620,551 ; Goodwill	2012 $2,326,567; Goodwill	2011 $0 ;   Intangible Assets/Amort	2012 $3,915,151; Intangible Assets/Amort	2011 $0 ;   Long Term Investments	2012 $32,560,816; Long Term Investments	2011 $31,310,618 ; Accounts Receivables	2012 $3,291,339; Accounts Receivables	2011 $2,847,129;  Total 2012	 $76,033,490; Total 2011	 $69,542,806 ;

Total Liabilities—For fiscal year 2012 the Association’s liabilities increased by $6.2 million (15.6%) to $45.6 million. The most significant change was in Long-Term Debt which increased by $5.3 million as a direct result of the financing of the Neal Schuman Publishing acquisition and the related refinancing of the Washington Office and Choice (CT) facilities. Other increases included accounts payable ($1.1 million) due to more activity from general operations and capital lease obligations ($818,913) related to 1) the reclassification of operating leases to capital leases and 2) the financing of the Association’s financial management system. Offsetting these increases were reductions in accrued liabilities ($875,905) due to the timing related to accruing payroll expenses in FY12 compared to FY11 and lower deferred revenue ($328,850).

ALA Consolidated Statement of Financial Position - Total Liabilities: 2012 and 2011:Accounts Payable 2012	 $4,399,578; Accounts Payable	2011 $3,256,913;  Capital Lease Current Portion	2012 $223,816; Capital Lease Current Portion	2011 $253,923 ; Capital Lease Obligation	2012 $485,209; Capital Lease Obligation	2011 $97,851 ; Accrued Liabilities	2012 $688,914; Accrued Liabilities	2011 $1,564,819;  Deferred Revenue	2012 $12,546,756; Deferred Revenue	2011 $12,875,606 ; Current LTD	2012 $647,500; Current LTD	2011 $215,945;  Post Retirement Benefits	2012 $17,126,536; Post Retirement Benefits	2011 $16,980,883 ; Long-Term Debt	2012  $9,452,500; Long-Term Debt 2011	 $4,179,673;  	Total 2012 $45,570,809; Total	2011 $39,425,613 ;

Net Asset balance—As a result of the Associations’ previously mentioned activities net assets for the year increased by $345,458 (1.1%) to $30.5 million.

General Fund

Total Revenues—For the year, totaled $27.3 million compared to $26.1 million in fiscal 2011. This represents an increase of $1.2 million (4.6%). The increase was essentially in two areas: 1) Publishing ($1.2 million) due to the increase in activity in ALA Editions related to the Neal Schuman acquisition and 2) Meetings & Conferences ($262,833) as a result of higher exhibit revenue from the Midwinter Meeting in Dallas.

General Fund Revenues: 2012 and 2011:Dues 2012 $5,770,610; Dues 2011	 $5,829,512 ; Publishing	2012 $11,203,274; Publishing 2011 $9,990,757 ; Meetings and Conferences 2012 $6,620,033; Meetings and Conferences	2011 $6,357,200; Products & Promotions 2012	 $1,288,498; Products & Promotions Products & Promotions  2011	 $1,271,473;  Interest & Dividends	2012 $751,945; Interest & Dividends 2011	 $851,496 ; Contributions	2012 $220,128; Contributions	2011 $274,129;  Miscellaneous	2012 $1,391,346; Miscellaneous	2011 $1,472,601;  Total 2012	 $27,245,834; Total 	2011 $26,047,168;

Total Expenses—For the year, totaled $28.6 million compared to $26.5 million in fiscal 2011. This represents an increase of $2.1 million (8.1%). The increase, both functionally and activity wise, was primarily in Publishing ($2.4 million) due to the additional activity resulting from the Neal Schuman Publishing acquisition in ALA Editions.

General Fund Expenses: 2012 and 2011:Payroll	 2012 $14,450,708; Payroll 2011 $14,049,935;  Outside Services 2012 $3,905,377; Outside Services 2011	 $3,692,949 ; Travel 2012	 $1,077,738; Travel	2011	 $961,876 ; Meetings and Conferences	2012 $2,983,257; Meetings and Conferences 2011 $2,976,411 ; Publications 2012 $3,346,024; Publications 2011 $2,907,461;  Operating	2012 $2,416,351;	Operating 2011 $1,701,934 ; Inter-Unit Transfers 2012 $438,609; Inter-Unit Transfers	2011 $193,669 ; 	Total 2012 $28,618,064; Total 2011 $26,484,235 ;

Net Revenue—As a result of the above activities, net revenue for the year was a loss of ($1.4 million).

Divisions

Total Revenues—Division revenues for the year increased by $1.7 million (12.1%) to $15.3 million, as there were two national division conferences compared to only one in FY11. As a result, revenue from Meetings & Conferences was higher by $1.8 million. Both PLA and AASL had successful conferences which generated additional revenue of $3.2 million and $1.1 million respectively. Offsetting the increases was a decline in Publishing revenue of $82,295 (-1.5%) and Contributions of $62,256 (-7.4%).

Division Revenues: 2012 and 2011:Dues	2012  $2,675,339; Dues 2011	 $2,650,905;  Publishing	2012  $5,318,568; Publishing	2011 $5,400,863;  Meetings and Conferences	2012  $5,341,535; Meetings and Conferences 2011	 $3,592,348;  Contributions	2012  $776,923; 	Contributions	 2011 $839,179 ; Miscellaneous	2012  $1,225,181; Miscellaneous 2011	 $1,196,940 ; Total 2012 	 $15,337,546; Total 2011	 $13,680,235;

Total Expenses—Division expenses for the year increased by $647,842 (4.7%) to $14.3 million. The increase can be attributed to higher Travel & Related expenses ($349,582) due to increased conference activity during the year, higher Overhead ($373,317) and the use of Outside Services ($226,158). Offsetting the increase was a reduction in Publications expenses ($258,741) and Inter-unit Transfers ($114,348). It should also be noted that ALTAFF ($50,910) and ASCLA ($41,577) received a total of $92,487 in small division support.

Division Expenses: 2012 and 2011:Payroll 2012 $5,329,751; Payroll	2011 $5,280,221 ; Outside Services 2012 $1,535,364; Outside Services  2011	 $1,293,983 ; Travel	2012 $764,969; Travel	2011 $415,387;  Meetings and Conferences 2012 $2,000,197; Meetings and Conferences  2011	 $2,007,018 ; Publications	2012 $1,360,263; Publications 2011	 $1,634,228 ; Operating	2012 $1,105,875; Operating	2011 $1,076,712;  Inter-unit Transfers 2012	 $217,401; Inter-unit Transfers 	2011 $343,426 ; Overhead	2012 $1,982,298; Overhead	2011 $1,597,304;  Total	 2012 $14,296,118; Total		2011 $13,648,279 ;

Net Revenue—As a result of these activities the Divisions realized net revenue of $1.0 million. This increased the Divisions net asset balance to $13.8 million.

Round Tables

Total Revenues—Round tables’ revenue increased marginally during the year by $443 (0.1%) to $350,582, while Total Expenses increased by $13,942 (6.2%) to $238,692. The result was a decline in Net Revenue of $13,500 (-10.8%) to $111,889. It should be noted that EMIERT accounted for 45.8% of the Round Tables net revenue at $51,255 as a result of strong CSK seal sales.  All of the Round Tables ended the year with a positive net asset balance which totaled $1.2 million.

Round Tables Revenues: 2012 and 2011:Dues  2012	 $175,291; Dues 	2011 $176,327;  Publishing	2012 $90,957; Publishing	2011 $97,654 ; Meetings and Conference	2012 $57,980; Meetings and Conference 2011	 $40,802;  Contributions	2012 $20,501; Contributions	2011 $30,217 ; Misc	2012 $5,853; Misc	2011 $5,140 ; TOTAL 2012	 $350,582; TOTAL  2011	 $350,140 ;

Round Tables Expenses: 2012 and 2011:Payroll and Related	2012 1,155; Payroll and Related 2011	2,390;  Outside Services 2012	10,131; Outside Services 2011	6,131;  Travel and Related	2012 3,190; Travel and Related 2011	9,944;  Meetings and Conference	2012 142,136; Meetings and Conference	 2011	105,535 ; Publication Related	2012 55,734; Publication Related	2011 69,114 ; Operating Expenses	2012 8,823; Operating Expenses 2011	14,002;  Overhead	2012 17,526; Overhead 2011 17,632 ; TOTAL 2012 238,695; TOTAL 	2011 224,748;

Long-Term Investment Fund—Endowment

The Long-Term Investment Fund net asset balance increased during the year by $2.1 million (6.7%) to $33.3 million. Most of the increase was in unrealized gains ($1.1 million) due to a reallocation of assets during the year from fixed income to equities.

ALA-APA

Total Revenues—The ALA-APA reported revenues during the year of $168,759, which compares to $158,563 in fiscal 2011. This represents an increase of $10,196 (6.4%). Significant positive change occurred in the area of certification—the CPLA (148 candidates) and LSSCP programs (311 candidates)—due to higher participation rates in each program. Offsetting these results was a decline in the sale of materials of $16,446 due to lower Salary Survey sales, which is produced every other year.

Total Expenses—For the year were essentially the same as in fiscal 2011declining by $406 (-0.3%) to $128,004. The most significant changes were realized in payroll and operating expenses. Payroll expenses declined by $20,290 (-33.0%) to $41,280 as the Director’s position was split between the APA and ALA. Offsetting this decline was an increase in operating expenses of $24,657 (76.4%) to $56,944 due to efforts to capitalize on revenue generating opportunities as they developed. Note that these expenses include the payment interest expenses of $7,560 on the outstanding loan.

Net Revenues—As a result of the above activities, the year ended with positive net revenues of $40,755. This was an increase of $10,602 (35.2%) and represents the third consecutive year of positive net revenue.

Loan Repayment—As a result of the positive net revenue generated during the year the ALA-APA was able to make its scheduled principal loan payment. This resulted in a payment of $30,000, which reduced the outstanding loan balance to $195,000.

Total Preliminary Budget

The total ALA FY 2013 budgeted revenues, which includes the General Fund, Divisions, Round Tables, Plant Fund, Grants and Awards and the Long-Term Investments, are $52,719,238 as compared to the FY 2012 budget of $50,085,061. The year-to-year increase of $2,634,177 (5.3%) reflects a full year of operation with Neal Schuman publishing, the expected approval of RDA and new conference pricing strategies. The total ALA FY 2013 expenses are $53,949,488 as compared to the FY 2012 expenses of $49,854,257. The total ALA budget reflects expenses exceeding revenues by $1.2 million as this is a spend-down year for two planned national division conferences in FY14.

The following illustrations represent some of the detail with respect to the above mentioned budgeted revenues and expenses for FY 2013:

FY 2013 General Fund Budgeted Revenues:Dues  	5,807,988;  Publishing	14,350,231 ; Products & Promotions	1,300,584 ; Meetings and Conferences	8,916,624 ; Interest Income	734,940 ; Misc	529,809 ; TOTAL 	31,640,176 ;

FY 2013 General Fund Budgeted Expenses:Payroll and Related	15,045,197;  Outside Services	3,906,802 ; Travel and Related	1,061,250 ; Meetings and Conferences	2,918,847 ; Publication Related	3,538,752 ; Operating Expenses	4,877,557 ; TOTAL 	31,348,405 ;

FY 2013 Division Budgeted Revenues:Dues  	2,703,738 ; Publishing	5,264,416 ; Grants and Awards	2,550 ; Meetings and Conference	3,524,609 ; Contributions	768,250 ; Misc	1,191,088 ; TOTAL 	13,454,651 ;

FY 2013 Division Budgeted Expenses:Payroll and Related	6,375,860 ; Outside Services	1,206,205 ; Travel and Related	555,945 ; Meetings and Conference	2,309,882 ; Publication Related	1,529,331 ; Operating Expenses	1,721,508 ; Overhead	1,516,095 ; TOTAL 	15,214,826 ;

FY 2013 Round Tables Budgeted Revenues:Dues  	183,266 ; Publishing	118,380;  Meetings and Conference	75,123 ; Contributions	20,169 ; Misc	4,766 ; TOTAL 	401,704 ;

FY 2013 Round Tables Budgeted Expenses:Payroll and Related	1,845 ; Outside Services	8,040 ; Travel and Related	3,310 ; Meetings and Conference	190,690 ; Publication Related	72,299 ; Operating Expenses	26,590 ; Overhead	18,299 ; TOTAL 	321,073 ;