AR AROUND OUND THE PICNIC THE PICNIC TABLE ABLE Finance 2020 - PowerPoint PPT Presentation

AR AROUND OUND THE PICNIC THE PICNIC TABLE ABLE Finance 2020 Update Leslie Backus Class A (nonalcoholic) Trustee General Service Board Treasurer

2019 A 2019 AUDIT UDIT RESUL RESULTS TS ❖ First draft of the Audit was completed on May 31st ❖ There was an issue with functional expenses that staff had to investigate – it was a NetSuite issue and it took about 4 weeks to resolve ❖ The final Audit was completed and sent to the Audit Committee for review in early July. ❖ Audit Committee met with Marks Paneth, LLC, the independent auditors on July 13 th to review the audit and to discuss any issues they discovered

2019 A 2019 AUDIT UDIT RESUL RESULTS TS ❖ The independent auditor reported that all three corporations’ financial statements received unmodified opinions ❖ In addition, the auditors reported no material weaknesses ❖ The auditors made 14 recommendations to improve our processes. Management has responded to all the recommendations

2019 A 2019 AUDIT UDIT RESUL RESULTS TS ❖ Why did the audit take so long? ❖ The audit had to work in 2 accounting systems: Traverse and NetSuite since the transition to NetSuite started mid year ❖ There were ongoing issues with the transition to NetSuite that delayed getting information to the auditors ❖ Onsite audit fieldwork was ongoing when COVID-19 hit and the office had to close; although staff had been making arrangements to complete all the audit work offsite the order to shelter in place came sooner than expected and not everything was prepared

2019 FIN 2019 FINANCIAL ANCIAL HIGH HIGHLIGHTS LIGHTS ❖ 7 th Tradition of Self-Support – $8.86 million set another record, up 5.71% from 2018 ❖ AAWS publishing profits – $9,36 million down 1% from 2018, used to cover shortfall between 7 th Tradition and Cost of Services, resulting in net GSO loss of $380,450 ($379,665 was reported in May) ❖ Grapevine subscription levels decreased 2% in 2019. 2019 results were a loss of $27,303 ($44,461 was reported in May) ❖ General Fund support of La Viña service activity – $297,392 ($289,314 was reported in May) ❖ Reserve Fund – $16.2 million resulting in ratio of 9.2 months

2019 FIN 2019 FINANCIAL ANCIAL HIGH HIGHLIGHTS LIGHTS ❖ Due to many issues with the transition to the new ERP system the audit on the financial results for 2019 has not been completed. The audit should be completed and reviewed by the Audit Committee by May 30 th . ❖ The first draft of the audit was completed on May 31 st and after careful review a few corrections were made and the audit was accepted by Audit Committee July 13 th . ❖ So if you see a few numbers that don’t quite match don’t worry the Finance Department and Marks Paneth, our independent auditors, are working to make sure the final audited financial for 2019 are correct. ❖ Now all the figures are correct – so the financials you will receive today are based on the audited results.

2020 Budgets 2020 Budgets – Wher here e Ar Are e They? hey? ❖ Budgets for 2020 are also being reviewed and updated ❖ AAWS has completed the 2020 amended budget, titled Budget Reforecast 2.01 ❖ Budget Reforecast 2.01 includes adjustments due to COVID-19 and reflects both a decrease in anticipated revenue as well as a decrease in anticipated expenses ❖ AA Grapevine will revise the 2020 budget by the October Board weekend

2019 2019 FIN FINANCIAL ANCIAL HIG HIGHLIG HLIGHTS HTS Amounts in $ 2019 2019 COMPARED TO 2019 2018 COMPARED TO 2018 ACTUAL BUDGET BUDGET ACTUAL ACTUAL GENER GENERAL L SER SERVIC ICE E OF OFFI FICE 8.86 M 8.86 M 7 th Tradition Contributions 8.38 M 0.48 M (5.7%) increase 8.38 M 0.48 M (5.7%) increase 11 11.6 M .6 M Cost of Services Provided to 11.2 M 0.4 M (4%) increase 11.4 M 0.2M (2%) increase Fellowship 2.7 2.7 M Shortfall between 7 th Tradition & 2.8 M 0.1 M (4%) decrease 3 M .3 M (10%) decrease Cost of Services (0 (0.38) .38)M Net Income 0.5 M (0.8 M) ( 176%) decrease 0.4 M 1.4 M (196%) decrease GRAPEVINE & LA VINA Average Circulation 71 71,182 ,182 76,086 4,904 (6.5%) decrease 72,300 1,118 (1.5%) decrease (27 (27,303) ,303) Net Income (Loss) (135 K) 107.7K (79.8%) better -149 K 275 K (82%) increase 297 29 7 K General Fund support of 166 K 131K increase 148 K 149 K (101%) increase La Viña service activity RESERVE FUND 9.2 9.2 Coverage Ratio 9.4 Decrease of 0.4 months 9.7 Increase of 0.5 months months months months (7%) months M – millions; K – thousands 1 1 – S 1 S 1

GRA GRATITUDE TITUDE 7 TH TH TRADITION TRADITION

7 TH TH TRAD TRADITION ITION – 2019 2019 – $8.86 MILLION $8.86 MILLION RECORD 7 TH TRADITON

2019 2019 HIG HIGHLIG HLIGHTS HTS ❖ 28,180 Groups made $6.9 million of 7 th Tradition contributions ▪ Represents 40.6% of total groups ▪ $245.715 average group contribution ❖ Individuals, Memoriam & Special Meetings contributed $1.3 million of 7 th Tradition contributions ❖ Total 7 th Tradition contributions were $8.86 million

th Tradition Contributions 7 th Number Received by Region

th Tradition Contributions 7 th Regional Im Impact by Value (U (USD)

th Tradition Contributions 7 th Regional Per Capita

Distribution of f Received Contributions Because more than 90% of total group and individual contributions are below $600, greater total are not displayed. Individuals reaching the maximum of $5,000 are not a significant proportion of total individual contributions.

th Tradition Contributions 7 th Im Impact by Value (U (USD)

“$8.06” Contributions Number Received by Region

“$8.06” Contributions Regional Im Impact by Valu lue (U (USD) 2019 Total $78,029.99

GR GROWTH WTH OF OF ON ON-LINE LINE CON CONTR TRIB IBUTIONS UTIONS 2010 – 2019 2010 2019 1,200,000 1,001,083 1,000,000 880,311 802,438 800,000 565,884 600,000 434,274 400,000 343,207 304,313 201,789 200,000 152,546 86,718 11.29% 1.38% 2.46% 3.09% 4.43% 5.03% 6.11% 7.19% 9.62% 10.59% 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

TH TRADITION 7 TH TRADITION SELF SELF-SUPPO SUPPORT – 2005 2005 – 2019 2019 10,000,000 8,863,480 9,000,000 8,409,452 8,385,009 7,934,869 8,000,000 7,154,146 6,906,371 6,898,068 7,000,000 6,557,608 6,526,002 6,462,760 6,408,421 6,296,110 6,264,454 6,000,000 5,417,046 5,068,712 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

A DOL A DOLLAR LAR IS NO IS NOT WH T WHAT T IT U IT USED SED TO O BE BE Remember inflation when deciding upon 1935: $1.00 2019: $18.84 your 7 th Tradition Self-Support Contributions for: - Group Meetings - Online Recurring Contributions - Birthday Gifts - November Gratitude Month

G.S.O.’s TWO BASIC FUNCTIONS • Publishing Publishing • Ser Services on Behalf vices on Behalf of of the G the G.S.B .S.B. Group Records

AAWS AA WS – PUBL PUBLISHI ISHING NG – 20 2019 19 ACT CTUAL AL VS VS 20 2019 19 BUDG UDGET ET $ in Thousands 2019 2019 INCREASE ACTUAL BUDGET (DECREASE) Net Sales – Literature 14,259 14,775 (516) Cost of Literature Sold 2,646 3,100 (454) Direct Shipping and Warehousing 1,956 1,900 56 Gross Profit 9,657 9,775 (118) Gross Profit Percentage 67.7% 66.2% 1.5% The YTD sales to budget variance was largely due to lower 34,137 100,000 (65,863) 66% decrease than anticipated sales of “Our Great Responsibilities”

GSO GSO & & AA AAWS WS – OPER OPERATING TING RES RESUL ULTS TS – 2005 2005 – 2019 2019 2,000,000 1,758,839 1,453,218 1,500,000 1,376,656 1,273,560 817,947 1,255,289 1,000,000 976,170 1,018,577 657,884 500,000 394,681 (275,365) 205,625 152,445 31,554 0 380,450 380,450 (500,000) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

GRAP GRAPEVINE EVINE – 20 2019 19 ACTU CTUAL AL VS VS 20 2019 19 BUDGET UDGET 2019 2019 Increase Actual Budget (Decrease) Average Circulation-Print 66,376 69,139 (2,763) Online & App 4,806 6,947 (2,141) Revenue 1,978 2,086 (108) Expenses 2,005 2,220 215 Net Income (27) (134) 107 $ in Thousands

GRAP GRAPEVINE EVINE – KEY KEY AMOUNT AMOUNTS – 5 YEA 5 YEAR R HIST HISTOR ORY GROSS PROFIT & NET PROFIT 1,800 1,52 ,529 1,600 1,449 1,449 1,41 ,418 1,394 1,394 1,322 1,322 1,400 1,240 1,200 1,000 Thousands 656 656 800 $ in 562 562 551 551 538 538 509 509 600 456 456 326 326 400 241 241 165 165 126 126 200 0 -$27 $27 -200 -149 149 -400 2019 2018 2017 2016 2015 2014 Grapevine 1,240 1,322 1,394 1,449 1,418 1,529 Other Content 656 562 538 456 551 509 Net Profit -27 -149 126 165 241 326

GRA GRAPE PEVINE VINE OPE OPERA RATING TING RE RESUL SULTS TS – 2005 2005 – 2019 2019 400,000 315,205 300,000 257,003 325,827 240,811 200,000 164,539 126,128 100,000 (25,047) 0 (48,873) 44,198 22,438 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (27,303) 27,303) (100,000) (132,594) (138,456) (149,167) (200,000) (300,000) (400,000) (399,037) (500,000)