2017 operating plan and budget: operating income …...

2017 Operating Plan and Budget:Operating Income and ExpenseSubmitted to 2016 Governing CouncilSeptember 2016

IREM® logo, IREM®, CERTIFIED PROPERTY MANAGER®, CPM®, the CPM key logo, ACCREDITED RESIDENTIAL MANAGER®, ARM®, the ARM torch logo, ACCREDITED MANAGEMENT ORGANIZATION®, AMO®, the AMO circle logo, Income/Expense Analysis®, Expense Analysis® and JPM® are registered marks of the Institute of Real Estate Management

Table of ContentsPage 3 2017 Operating Plan and Budget OverviewPage 9 Operating Plan and Budget Page 13 Financial Philosophy and ReservesPage 15 Business LinesPage 16 Member Retention1 CredentialingPage 24 Knowledge ProductsPage 27 Chapter LeadershipPage 30 Volunteer LeadershipPage 33 External RelationsPage 36 National EventsPage 39 InternationalPage 42 Business Development for MembersPage 45 Corporate OperationsPage 48 Capital Expense Budget Page 49 Depreciation Schedule

Page 2

2017 IREM Operating Plan and Budget Presented to Governing Council 2016

The 2017 operating plan and budget were developed by the IREM Headquarters staff with guidance and direction from and thorough

review by the 2016-2017 officer team. They were developed with attention to IREM’s current strategic plan, a focus on growth in

membership and revenues, and appropriate investments in the future. The budget is organized around 10 business lines of related

programs and product lines that enable the evaluation of program effectiveness and performance and reinforce accountability and is

mindful of the organization’s reserve policy.

The 2017 operating budget is a break-even budget that reflects:

Operating income of $12,561,770 – up 4.0% over the 2016 year-end forecast

Operating expenses totaling $12,559,305 – also up 4.0% over the 2016 year-end forecast

Net operating income from operations of $2,465

Cash contribution to reserves of $75,215 – contributions 12.6% greater than forecast for 2016

A 60% decline in depreciation – from $462,756 in 2016 down to $182,264

An increase in total (U.S. and international) membership dues of 2.3%, to $7,310,936 – representing 58% of the total operating

income budget – with no increase in member dues levels

A combined U.S. and international membership count of 21,235 by year-end 2017, reflecting 4.4% membership growth and CPM

growth of 1.4%, achieved through gains in new members, reinstated members, and solid retention numbers, with 8.7%% of all

members and 13.3% of all CPMs coming from outside the U.S.

Revenue from credentialing programs (comprising application fees, credentialing courses, exam fees) increasing by 5.2% - with a

$100 increase in tuition for students who register fewer than 30 days before a classroom course, but no other increase in fees or

tuitions paid by students or royalties paid by chapters

Total credentialing course enrollments climbing to 5,623, a 3.3% increase, with 59% of these students attending classroom

courses, and the remaining 41% electing the online option

A $48,000 savings as a result of the transition from 2016’s combined Leadership and Legislative Summit and Capitol Hill Visit

Day to the 2017 plan for four regional meetings, in-district Congressional visits, and the new Federal Advocacy Board

An increase of only 1.7% in staff salaries and benefits, which incorporates appropriate market-aligned salary and benefit increases,

offset by a decrease in total number of FTEs resulting from current and anticipated operational efficiencies

A capital budget of $75,750, which incorporates development of new and updated publications, software upgrades, and

replacement servers

Key Themes for 2017 IREM’s current strategic direction is driven by positioning IREM as a leader within the real estate management industry across all

asset classes and for real estate property and asset managers at all career levels. This overarching narrative is woven throughout the

2017 operating plan by attention to these six themes:

Theme 1. Target growth of millennial market in the office and apartment sectors

Theme 2. Execute IREM’s strategic meeting direction

Theme 3. Extend outreach efforts into the corporate market

Theme 4. Differentiate and reposition the IREM image

Theme 5. Elevate visibility of key programs

Theme 6. Plan for the future

Tactical plans, operating budgets, and targeted outcomes for each of these six themes are woven throughout the 2017 operating plan

and budget. Expanded upon here are some of the major thrusts, with budget impacts noted as appropriate.

Theme 1. Target growth of millennial market in the office and apartment sectors

Rebrand the ACoM certification, repositioning it as a program designed for entry-level commercial property managers (versus

the current target market of commercial site managers with small portfolios). Support this by developing an online course

specifically for the ACoM that directly speaks to what younger, entry-level commercial managers need to succeed and fully meets

the education requirement for the certification, similar to the RES201 for the ARM program. An allocation of $10,750 is included

in the budget for development of this new course, which will be available in the fall, so that the “new and improved ACoM” can

be launched at IREM’s Global Summit in October.

Deepen market penetration of the ARM certification by expanding the capacity to deliver the RES201 course and focusing on

the entry-level apartment community manager. Knowing the direct relationship between offerings of the RES201 course and new

ARM members, the pool of RES201 instructors, particularly in key markets where there is a void, will be expanded by recruiting,

training, and onboarding new RES201 instructors; funds of nearly $50,000 are earmarked for this purpose. In concert with this

instructor capacity-building, the RES201 course content and thrust will be recast to appeal more directly to younger residential

managers just starting their careers.

Target CPM recruitment campaigns to millennials in the 20-30 age group who are entering the property management workforce

and are seeking training, industry insights, the tools they need to succeed, and industry contacts. Among these campaigns will be a

continuation of the CPM Sponsor program and the Member ROI Club program, both of which rely on word-of-mouth marketing

and members recruiting members.

Maximize touch points and meaningful engagements with young professionals who are contemplating IREM membership or

already have become members. Continue the robust college and university outreach program that engages students. Support young

professionals and connect them with mentors who can help them up the career ladder. Continue to implement recommendations

from the 2015 young professionals task force by: recognizing and engaging young professionals through a “30 under 30” program

planned, producing guidelines for career mentoring, intentionally involving young professionals in governance activities within

IREM and conversations about IREM and the industry, and offering a leadership-focused CPM-track program targeting real estate

management practitioners under 35.

Direct intentional, focused attention on racial and ethnic diversity. Among action steps included in the 2017 plan is to continue

and more aggressively promote the IREM Diversity Scholarship program, funded by the IREM Foundation, and leverage diversity

scholars to attract leaders from underrepresented market segments; continue outreach to Historically Black Colleges and

Universities (HBCUs), supporting those interested in starting real estate degree programs and engaging more deeply with those

that have such programs in place; and speaking out on the value of a diverse workforce and the richness it offers.

Theme 2. Execute IREM’s strategic meeting direction

The transition from the Washington, DC-based Leadership and Legislative Summit to regional gatherings and grassroots advocacy

will take place in 2017, with an overall bottom-line impact on the operating budget of $48,000 in savings. This reflects the elimination

of both income and expense related to the LLS and all of its related governance and legislative activities, the addition of income and

expense for the four US regional meetings, and the addition of expenses in the government affairs program for the new advocacy

board and in-district outreach.

Launch the regional leadership meetings, offering a full-day education and networking program directed toward developing

chapter leadership and strengthening the chapter network. This will be complemented with industry education and networking

events, delivered through existing signature events or directly by IREM. The budget anticipates $129,950 in income and $205,933

in expenses for the four regional meetings in the U.S. A fifth regional gathering will take place in Canada; its budget is contained

in the international program budget. The 2017 regional meetings will be held:

Northeast Regional Meeting - New York, NY, March 21-23, 2017

South/Southeast Regional Meeting - Atlanta, GA, April 4-6, 2017

West Regional Meeting - Costa Mesa, CA, May 9-11, 2017

Midwest Regional Meeting - Minneapolis, MN, June 6-8, 2017

Region 14 Leadership Conference and REIC Annual Conference - Halifax, Nova Scotia, June 13-15, 2017

Introduce the IREM Global Summit – a retooling of the IREM Fall Conference as the single gathering of IREM members from

around the world. The Summit will bring together the best of industry-focused education and learning, opportunities for

networking with colleagues, a venue for Industry Partners and other service providers to connect with IREM’s member

practitioners, face-to-face committee and board meetings and other governance activities, and a platform to recognize new REME

and other award recipients and install the 2018 leadership team. The 2017 IREM Global Summit will take place in Chicago at the

Hilton Chicago Hotel October 10-14, 2017, and serve as a kick-off of IREM’s 85th anniversary year. The Global Summit budget

anticipates $355,610 in income and $466,192 in expense, with the expense budget enhanced to support a more robust speaker

schedule. (Note that exhibitor and sponsor revenues associated with the Global Summit appear in the vendor relations budget.)

Impact federal policy through in-district advocacy at the grassroots level partnered with a new Federal Advocacy Board.

With the dissolution of the Leadership and Legislative Summit, the vehicle for gaining the attention of Members of Congress will

shift to in-district Congressional meetings. A model for conducting these in-district meetings will be unveiled this fall, and

throughout 2017 chapters will be supported in these initiatives and urged to share the results of their efforts. Supplementing and

complimenting the chapters’ in-district advocacy will be the new Federal Advocacy Board, which will serve as IREM’s primary

vehicle for connecting in Washington, DC, with key Congressional leaders, government agencies, and regulatory bodies whose

interests intersect with those of the real estate management industry. All told, the government affairs budget will increase by

$23,000 or 51% in 2017.

Theme 3. Extend outreach efforts into corporate markets

Conduct IREM’s second Commercial Summit in Chicago in January, continuing to build on the momentum that began in 2016

by bringing together commercial property management company leaders with their asset management clients for the purpose of

information and idea sharing, positioning IREM as a conduit for valuable information exchange, and creating an opportunity to

learn from market leaders and their clients the challenges they are facing and issues they are addressing.

Implement enhancements to the AMO program. Strengthen the connection AMO companies have with IREM and the benefit

they derive in terms of both service to support their business enterprises and exposure to their client markets. The budgeted

allocation for this activity has been increased 43%, which will go toward continuing and improving on communications with and

services to AMO firms and aggressively promoting the value of hiring of AMO firms to real estate owners and investors through

website, advertising, public relations efforts, and direct mail promotions. In addition, an exclusive session for Executive CPMs of

AMO firms will be presented at the Global Summit in October.

Enrich and expand corporate relationships with major commercial and multifamily property management companies,

including both national and multi-national companies as well as regional firms. Among the strategies to achieve this is capitalizing

on corporate MOU relationships to maximum advantage for both parties; providing in-house education and training and licensed

education delivery; recognizing companies with a strong IREM presence based on membership and engagement levels; and

directing dedicated staff resources through an expanded corporate business development initiative.

Deepen connections with the real estate asset management community. This will include leveraging the Commercial Summit as

an opportunity to engage with asset managers and share the findings from that engagement with others, plus utilizing the results of

asset management research being undertaken in 2016 to identify opportunities within the asset management space.

Enrich relationships with IREM Industry Partners and other vendors and providers of products and services to the real estate

management industry. Dedicated in-house corporate business development staff will champion this refreshed outreach. At the

same time, the menu of opportunities available to vendors will be expanded to include content development and regional meeting

participation in addition to print and online advertising and program sponsorship. A $56,000 or 20% jump in revenues is expected.

Theme 4. Differentiate and reposition the IREM image

Develop and deliver clear and consistent branding and messaging strategies. Implement upgrades, enhancements, and redesigns

for corporate and product messaging and positioning, logos, and imagery with the goal of developing a new, differentiated identity

in the minds of customers, members, and other industry stakeholders. Nearly $90,000 has been set aside for this, supplemented by

existing budgets for collaterals and other corporate communications activities that will be created with the new branding. The

launch of IREM’s rebranded assets will take place during the Global Summit in Chicago.

Articulate a value proposition that resonates with target markets – one that is distinct, relevant, and consistent with the updated

strategic plan and is rolled out in concert with and part of the rebranding initiative.

Establish IREM as a thought leader through outreach to the media and focusing on topics critical to real estate management

industry. This will include participation in the National Association of Real Estate Editors (NAREE) conference and utilization of

content marketing and media outreach platforms and targeted attention to four key arenas, which collectively have an expanded

budget of nearly $60,000:

Asset management – positioning IREM as a resource for and about asset management

Technology – by developing a platform for informing members of new technology tools and emerging technology trends

Leadership – reinforcing IREM’s extensive offering of leadership development products ranging from white papers to online

education to classroom courses

Best practices – updating IREM’s best practices for delivery of real estate management services and expanding it as a product

line

Produce and combine compelling content with cutting-edge delivery. Utilize members as subject matter experts, secure

engagements with outside consultants and researchers, and mobilize in-house staff talent to develop and produce trusted content on

relevant issues. Expand the platform for content delivery to upgrade webinar offerings, embrace more video, and utilize podcasts.

Investigate and implement enhancements to IREM’s learning management system as a key education delivery and credentialing

delivery vehicle

Theme 5. Elevate visibility of key programs

Aggressively promote and reinforce the value proposition of the IREM Certified Sustainable Property (CSP) certification

within the real estate management industry, and particularly in the multifamily sector, with a goal of certifying 110 buildings in

2017. Raise awareness of properties that obtain the CSP certification, showcasing them as models of sustainable building

operations.

Build awareness of the REME Awards program and REME Awards recipients with the objective of increasing both the quantity

and quality of submittals and elevating the important role played by property management in the real estate sector.

Raise the profile of the IREM Income/Expense Analysis Reports as indispensable sources of reliable operating data with the goal

of increasing industry and user awareness. Identify potential new user groups and sales strategies, identify and implement

strategies for increasing submittal counts to improve the integrity and scope of the data, and continue to enhance the readability

and usability of the family of Income/Expense products

Theme 6. Plan for the future

Adopt and begin execution of a new three-year strategic plan that addresses key external issues, incorporates aspirational

challenges, and is focused on major goals

Continue the process of intentional succession planning targeted to both volunteers and headquarters staff. Attract and engage

young and racially diverse professionals as volunteer leaders throughout the organization in ways that are meaningful to them.

Develop future staff leaders and position them to seamlessly move into positions to be vacated by retiring staff members.

2017 Operating Income and Expense

2012 2013 2014 2015 2016F 2017BDirect Income $11,261,147 $11,370,490 $11,741,117 $11,765,824 $12,080,426 $12,561,770

Direct Expense $10,884,570 $10,904,256 $11,631,831 $11,356,974 $12,073,638 $12,559,305

$‐

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

_ __ 2015 Actual 2016 Budget 2016 Recast

2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

17-Budget vs

16-Forecast

% Variance

Fav/Unfav)

17-Bud vs

16-Forecast

MEMBER RETENTION Direct Income 6,756,926 6,736,128 6,805,110 6,814,098 6,945,361 131,263 1.9%

Direct Expenses (185,662) (213,175) (197,995) (214,195) (223,215) (9,020) -4.2%

Direct Contribution 6,571,263 6,522,953 6,607,115 6,599,903 6,722,146 122,243 1.9%

CREDENTIALING Direct Income 2,566,755 2,714,474 2,679,434 2,672,434 2,812,071 139,637 5.2%

Direct Expenses (854,944) (879,501) (889,940) (886,367) (985,856) (99,489) -11.2%


KNOWLEDGE PRODUCTS Direct Income 650,023 715,048 634,132 614,058 619,308 5,250 0.9%

Direct Expenses (572,829) (633,861) (568,683) (574,299) (636,275) (61,976) -10.8%

Direct Contribution 77,193 81,187 65,448 39,759 (16,966) (56,725) -142.7%

CHAPTER LEADERSHIP Direct Income 86,598 90,090 90,090 90,090 86,075 (4,015) -4.5%

Direct Expenses (213,869) (210,655) (214,155) (209,155) (210,040) (885) -0.4%

Direct Contribution (127,271) (120,565) (124,065) (119,065) (123,965) (4,900) -4.1%

VOLUNTEER LEADERSHIP Direct Expenses (350,467) (466,265) (469,316) (472,723) (393,142) 79,581 16.8%

Direct Contribution (350,467) (466,265) (469,316) (472,723) (393,142) 79,581 16.8%

EXTERNAL RELATIONS Direct Income 276,849 374,430 328,440 333,250 398,360 65,110 19.5%

Direct Expenses (312,145) (420,417) (394,723) (382,884) (402,475) (19,591) -5.1%


NATIONAL EVENTS Direct Income 439,514 482,680 482,035 474,250 485,560 11,310 2.4%

Direct Expenses (576,782) (637,755) (658,920) (642,193) (697,125) (54,932) -8.6%


INTERNATIONAL Direct Income 620,840 764,607 736,837 691,461 772,305 80,844 11.7%

Direct Expenses (272,537) (412,383) (371,800) (336,105) (400,042) (63,937) -19.0%

Direct Contribution 348,303 352,224 365,037 355,356 372,263 16,907 4.8%

BUSINESS DEVELOPMENT FOR MEMBERS Direct Income 284,161 333,000 310,000 294,100 325,200 31,100 10.6%

Direct Expenses (260,602) (275,100) (269,600) (258,750) (277,200) (18,450) -7.1%


CORPORATE OPERATIONS Direct Income 84,158 109,564 95,564 96,685 117,530 20,845 21.6%

Direct Expenses (7,757,135) (8,078,584) (8,027,958) (8,096,967) (8,333,934) (236,967) -2.9%

Direct Contribution (7,672,977) (7,969,020) (7,932,394) (8,000,282) (8,216,404) (216,122) -2.7%

* 6 months of actual results + 6 months of projected results

IREM OPERATING PLAN AND BUDGET: 2017


OPERATING RECAP __ 2015 Actual 2016 Budget 2016 Recast

2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

17-Budget vs

16-Forecast

% Variance

Fav/Unfav)

17-Bud vs

16-Forecast

Direct Income 11,765,824 12,320,021 12,161,641 12,080,426 12,561,770 481,344 4.0%

Direct Expenses (11,356,974) (12,227,696) (12,063,091) (12,073,638) (12,559,305) (485,667) -4.0%

Net Income/Loss From Operations 408,850 92,325 98,550 6,788 2,465 (4,323) -63.7%

DEPRECIATION _ 2015 Actual 2016 Budget 2016 Recast

2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

17-Budget vs

16-Forecast

% Variance

Fav/Unfav)

17-Bud vs

16-Forecast

DEPRECIATION Direct Expenses (614,828) (489,542) (464,843) (462,756) (182,264) 280,492 60.6%


Net Operating Income/(Loss) After Depreciation (205,978) (397,217) (366,293) (455,968) (179,799) 276,169 60.6%

NET INVESTMENTS _ 2015 Actual 2016 Budget 2016 Recast

2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

17-Budget vs

16-Forecast

% Variance

Fav/Unfav)

17-Bud vs

16-Forecast

INVESTMENTS Direct Income (80,192) 196,549 196,549 125,005 165,000 39,995 32.0%

Direct Expenses (32,338) (34,250) (34,250) (17,482) (16,500) 982 5.6%

Direct Contribution (112,530) 162,299 162,299 107,523 148,500 40,977 38.1%

TOTAL RECAP _ 2015 Actual 2016 Budget 2016 Recast

2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

17-Budget vs

16-Forecast

% Variance

Fav/Unfav)

17-Bud vs

16-Forecast

Direct Income 11,685,632 12,516,570 12,358,190 12,205,431 12,726,770 521,339 4.3%

Direct Expenses (12,004,139) (12,751,488) (12,562,184) (12,553,876) (12,758,069) (204,193) -1.6%

Net Income/(Loss) (318,508) (234,918) (203,994) (348,445) (31,299) 317,146 91.0%



INCOME FROM OPERATIONS X 2015 Actual 2016 Budget 2016 Recast

2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

17-Budget vs

16-Forecast

% Variance

Fav/Unfav)

17-Bud vs

16-Forecast

OPERATING INCOME 11,765,824 12,320,021 12,161,641 12,080,426 12,561,770 481,344 4.0%

OPERATING EXPENSES (11,356,974) (12,227,696) (12,063,091) (12,073,638) (12,559,305) (485,667) -4.0%

NET INCOME/(LOSS) FROM OPERATIONS 408,850 92,325 98,550 6,788 2,465 (4,323) -63.7%

CAPITAL EXPENDITURES (700,280) (60,000) (60,000) (47,494) (75,750) (28,256) -59.5%

NET INVESTMENT INCOME (112,530) 162,299 162,299 107,523 148,500 40,977 38.1%

CASH CONTRIBUTION TO RESERVES (403,960) 194,624 200,849 66,817 75,215 8,398 12.6%


IREM RESERVE POSITION & CONTRIBUTION TO RESERVES

OPERATING STATEMENT OF INCOME AND EXPENSES (FOR FINANCIAL PHILOSOPHY)

2008 2009 2010 2011 2012 2013 2014 2015 2016 Forecast 2017 Budget

INCOME (INCLUDES INVESTMENTS)

Total income $10,640,893 $11,084,483 $11,431,410 $10,842,570 $11,528,206 $11,640,217 $11,829,513 $11,685,657 $12,205,431 $12,726,770

% change (YOY) -8.6% 4.2% 3.1% -5.2% 6.3% 1.0% 1.6% -1.2% 4.4% 4.3%

EXPENSE (INCLUDES DEPRECIATION)

Total expense ($11,729,347) ($10,633,680) ($10,896,238) ($11,285,513) ($11,425,409) ($11,492,813) ($12,255,068) ($12,004,163) ($12,553,876) ($12,758,069)

% change (YOY) -0.8% 9.3% -2.5% -3.6% -1.2% -0.6% -6.6% 2.0% -4.6% -1.6%

EXCESS OF INCOME OVER EXPENSE

Total excess ($1,088,454) $450,803 $535,172 ($442,943) $102,797 $147,404 ($425,555) ($318,506) ($348,445) ($31,299)

% change (YOY) -30309.7% -141.4% 18.7% -182.8% -123.2% 43.4% -388.7% -25.2% 9.4% -91.0%

DEPRECIATION (ADD BACK)

Total depreciation $353,801 $364,132 $258,039 $602,864 $507,597 $552,230 $582,448 $614,831 $462,756 $182,264

% change (YOY) 17.8% -2.9% 29.1% -133.6% 15.8% -8.8% -5.5% -5.6% 24.7% 60.6%

CASH PROFIT FROM OPERATIONS

Total excess ($734,653) $814,935 $793,211 $159,921 $610,394 $699,634 $156,893 $296,325 $114,311 $150,965

% change (YOY) -269.3% -210.9% -2.7% -79.8% 281.7% 14.6% -77.6% 88.9% -61.4% 32.1%

CONTRIBUTION TO RESERVES

2008 2009 2010 2011 2012 2013 2014 2015 2016 Forecast 2017 Budget

INCOME (INCLUDES INVESTMENTS)

Total income $10,640,893 $11,084,483 $11,431,410 $10,842,570 $11,528,206 $11,640,217 $11,829,513 $11,685,657 $12,205,431 $12,726,770

% change (YOY) -8.6% 4.2% 3.1% -5.2% 6.3% 1.0% 1.6% -1.2% 4.4% 4.3%

EXPENSE (EXCLUDES DEPRECIATION)

Total expense ($11,375,546) ($10,269,548) ($10,638,199) ($10,682,649) ($10,917,812) ($10,940,583) ($11,672,620) ($11,389,332) ($12,091,120) ($12,575,805)

% change (YOY) -1.5% 9.7% -3.6% -0.4% -2.2% -0.2% -6.7% 2.4% -6.2% -4.0%

CAPITAL EXPENSE

Total capital expense ($520,847) ($629,875) ($898,737) ($805,067) ($284,904) ($185,649) ($239,184) ($700,280) ($47,494) ($75,750)

% change (YOY) -75.4% -20.9% -42.7% 10.4% 64.6% 34.8% -28.8% -192.8% 93.2% -59.5%

TOTAL CASH CONTRIBUTION TO RESERVES

Total contribution ($1,255,500) $185,060 ($105,526) ($645,146) $325,490 $513,985 ($82,291) ($403,955) $66,817 $75,215

% change (YOY) -1017.4% -114.7% -157.0% 511.4% -150.5% 57.9% -116.0% 390.9% -116.5% 12.6%

AVERAGE CASH RESERVES VS POLICY (33.3% OF AVERAGE OPERATING EXPENSES EXCLUDING DEPRECIATION)

Required reserves $3,788,057 $3,419,759 $3,542,520 $3,557,322 $3,635,631 $3,643,214 $3,886,982 $3,792,648 $4,026,343 $4,187,743

Actual average reserves $6,146,040 $5,363,900 $5,635,589 $5,139,615 $4,755,834 $5,470,023 $5,967,678 $5,657,073 $5,551,796 $5,622,812

Over (under) $2,357,983 $1,944,141 $2,093,069 $1,582,293 $1,120,203 $1,826,809 $2,080,696 $1,864,426 $1,525,453 $1,435,069

Actual reserves as % of cash

expense 162.2% 156.9% 159.1% 144.5% 130.8% 150.1% 153.5% 149.2% 137.9% 134.3%

2008 2009 2010 2011 2012 2013 2014 20152016

Forecast2017 Budget

Required reserves $3,788,057 $3,419,759 $3,542,520 $3,557,322 $3,635,631 $3,643,214 $3,886,982 $3,792,648 $4,026,343 $4,187,743

Actual average reserves $6,146,040 $5,363,900 $5,635,589 $5,139,615 $4,755,834 $5,470,023 $5,967,678 $5,657,073 $5,551,796 $5,622,812

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

Financial Reserves

Reserve RequirementFour months average operating expenses, less depreciation

Actual average reserves

Business Lines

1. Member Retention – comprises US membership dues, dues collection and retention activities, Associate membership, and ethics administration

2. Credentialing Programs – includes all courses leading to IREM credentials, admissions administration, and marketing of credentialed membership programs and credentialing courses

3. Knowledge Products – made up of non‐credentialing professional development courses, Journal of Property Management, publications, Income/Expense and other industry research, contract development work, webinars, forms, and all other knowledge products

4. Chapter Leadership – programs and services that support US chapters5. Volunteer Leadership – programs and services that support leadership and governance activities and corporate strategy6. External Relations – contains programs and initiatives that promote IREM as an organization throughout the US and foster

relationships with real estate companies, industry associations and leaders, academic institutions, government bodies, and vendors

7. National Events – production and delivery of U.S. regional leadership conferences and fall Global Summit8. International – comprises all programs and activities that take place outside the US, including education, membership

admissions, member service, chapter service and support, and external relations9. Business Development for Members – programs and initiatives aimed at increasing employment and business opportunities for

and promote expertise of IREM’s credentialed members 10. Corporate Operations – contains all administrative costs of running IREM, including rent and other office expenses, finance and

accounting, insurance and risk management, information technology, all salaries and benefits, contingency expense, as well as a service contract with the IREM Foundation

IREM’s operating plan and budget are organized around 10 business lines – core activities represented by groups of similar products, programs, services, and revenue‐generating activities. Each business line is made up of a series of programs – closely aligned individual products, programs, services, and revenue‐generating activities.

Business Line: Member RetentionU.S. membership dues invoicing and collections, member retention communications and campaigns, Associate membership admissions, and administration of IREM’s ethics program

Programs in this business line:

Dues – U.S. member dues invoicing and collection for all member types, processing new emeritus members and reinstatements, NAR Institute Affiliate (IA) membership administration; expenses include member engagement communications and chapter payments for Associate dues

Associates – Associate Member admissions processing for U.S.

Ethics – legal and administrative support for oversight of IREM's Codes of Professional Ethics through the three Ethics Boards

Business Line: Member Retention2017 Highlights Total U.S. membership will reach nearly 19,400 by end

of 2017

No increase in dues rates for any member categories; last dues increase was in 2015 when dues were raised by 2‐5%

2012 2013 2014 2015 2016F 2017BDirect Income $6,398,083 $6,677,652 $6,704,394 $6,756,926 $6,814,361 $6,945,361

Direct Expense $148,996 $141,527 $189,116 $185,662 $214,195 $223,215

$‐

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

BUSINESS LINE: MEMBER RETENTION

Program Name Business Line_ 2015 Actual 2016 Budget 2016 Recast

2016 Forecast

(6 + 6 ) * 2017 Budget

Variance

Fav/(Unfav)

2017-B vs 2016-F

% Variance

Fav/Unfav)

2017-B vs 2016-F

DUES - U.S. MEMBER RETENTIONDirect Income 6,756,926 6,736,128 6,805,110 6,814,098 6,945,361 131,263 1.9%

Direct Expenses (174,099) (203,175) (187,995) (201,895) (209,615) (7,720) -3.8%


ASSOCIATES MEMBER RETENTIONDirect Expenses (8,353) (7,500) (7,500) (9,200) (10,200) (1,000) -10.9%


ETHICS ADMINISTRATION MEMBER RETENTIONDirect Expenses (3,210) (2,500) (2,500) (3,100) (3,400) (300) -9.7%

Direct Contribution (3,210) (2,500) (2,500) (3,100) (3,400) (300) -9.7%

Net Income/(Loss) 6,571,263 6,522,953 6,607,115 6,599,903 6,722,146 122,243 1.9%


YEAR-END MEMBERSHIP COUNTS

2008 2009 2010 2011 2012 2013 2014 2015

2016

Forecast

2017

BudgetCPM

U.S. 7,668 7,615 7,537 7,405 7,486 7,494 7,427 7,432 7,458 7,534

International 1,037 1,157 1,024 1,001 1,020 1,024 1,038 1,061 1,113 1,157

Total CPM Members 8,705 8,772 8,561 8,406 8,506 8,518 8,465 8,493 8,571 8,691

% Change 0.7% 0.8% -2.4% -1.8% 1.2% 0.1% -0.6% 0.3% 0.9% 1.4%

CPM approvals U.S. 369 335 277 291 286 329 310 293 250 300

CPM approvals International 158 166 145 124 109 93 115 102 135 127

Candidate

U.S. 3,326 3,087 3,139 3,037 3,244 3,173 3,020 3,037 3,200 3,361

International 175 163 172 156 164 186 196 204 218 234

Total Candidate Members 3,501 3,250 3,311 3,193 3,408 3,359 3,216 3,241 3,418 3,595

% Change 5.9% -7.2% 1.9% -3.6% 6.7% -1.4% -4.3% 0.8% 5.5% 5.2%

Candidate approvals U.S. 1,261 1,051 1,057 1,065 1,110 924 850 959 1,000 1,000

Candidate approvals International 33 28 49 63 146 70 63 102 53 56

ARM

U.S. 2,865 2,766 2,752 2,774 2,868 3,016 3,075 3,142 3,305 3,469

U.S. Duals: ARM/CPM or ARM/Candidate or

ARM/ACoM 629 619 646 641 707 719 689 665 656 650

International 210 246 271 209 212 213 255 269 297 321

Total ARM Members 3,704 3,631 3,669 3,624 3,787 3,948 4,019 4,076 4,258 4,440

% Change 0.2% -2.0% 1.0% -1.2% 4.5% 4.3% 1.8% 1.4% 4.5% 4.3%

ARM approvals U.S. 489 377 400 494 509 453 409 445 495 495

ARM approvals International 29 56 40 54 29 21 53 36 57 56

Total ARM Candidates (Canada) 30 34 39 61 70 74 92

ACoM

U.S. 20 34 39 48 50 54 49 54 67 70

U.S. Duals: ACoM/CPM or ACoM/Candidate or

ACoM/ARM 24 38 53 60 61 65 77 75 70 68

International 2 4 6 7 16 16 17 21 25 31

Total ACoM Members 46 76 98 115 127 135 143 150 162 169

Total ACoM Candidates (Canada) 6 5 6 8 3 3 5

Associate Members 2,210 2,058 1,918 1,909 1,779 2,561 2,892 3,110 3,507 3,904

% Change 1.1% -6.9% -6.8% -0.5% -6.8% 44.0% 12.9% 7.5% 12.8% 11.3%

Student Members 280 323 308 188 336 443 372 305 298 295

Academic Members 21 21 25 22 26 32 39 49 45 44

Total Members 18,467 18,131 17,890 17,493 18,008 19,041 19,215 19,497 20,336 21,235

% change 2.1% -1.8% -1.3% -2.2% 2.9% 5.7% 0.9% 1.5% 4.3% 4.4%

AMO

U.S. HQs 547 550 553 560 562

International HQs 6 7 7 7 8

Total AMO Headquarters 515 524 537 537 560 553 557 560 567 570

% Change 1.6% 1.7% 2.5% 0.0% 4.3% -1.3% 0.7% 0.5% 1.3% 0.5%

U.S. Branches 572 581 570 580

International Branches 8 6 3 3

Total AMO Branches 617 542 568 568 572 580 587 0 573 583

Total AMO Offices 1,133 1,144 560 1,140 1,153

AMO approvals U.S. 23 30 33 25 35 18 20 19 20 20

AMO approvals International 2 1 0 0 0

MEMBERSHIP DUES AND FEES HISTORY

CPM Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Budget

CPM $525 $525 $545 $545 $545 $555 $555 $565 $565 $565

% change 3.8% 1.8% 1.8%

CPM-Emeritus/Lifetime

(no new Lifetime after 2001) $105 $105 $109 - $273 $109 - $273 $109 - $272.50 $111 - $277.50 $111 - $277.50 $113 - $283 $113 - $283 $113 - $283

% change

CPM-Past President $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

CPM-Inactive (no new after 2001)

CPM-International (range) $148 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372

CPM Candidate $470 $470 $490 $490 $490 $495 $495 $495 $495 $495

% change 4.3% 1.0%

CPM Candidate application fee $150 $150 $150 $160 $160 $160 $160 $160 $160 $160

% change 6.7%

CPM application fee $200 $200 $200 $210 $210 $210 $210 $210 $210 $210

% change 5.0%

CPM Fast Track Fee $630 $630 $630 $800

CPM certification exam fee $100 $100 $100 $100 $100 $100 $270 $270 $270 $270

% change 170.0%

Management plan fee $750 $750 $750 $750 $750 $750 $750 $750 $750 $750

% change 316.7%

MPSA fee $1,295 $1,295 $1,295 $1,295 $1,295 $1,295 $1,295 $1,295 $1,295 $1,295

% change 78.6%

ARM Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Budget

ARM $195 $195 $205 $205 $205 $210 $210 $220 $220 $220

% change 5.1% 2.4% 4.8%

CPM/ARM dual designees $95 $95 $95 $103 $102.50 $105 $105 $110 $110 $110

% change 8.4% -0.5% 2.4% 4.8%

ARM-Lifetime (no new after 2001) $40 $40 $40 $40 $40 $42 $42 $44 $44 $44

% change 5.0% 4.8%

ARM-Emeritus $40 $40 $40 $40 $40 $42 $42 $44-$110 $44-$110 $44-$110

% change 5.0% 4.8%

ARM-Inactive (no new after 2001)

ARM-International (range) $53 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131

ARM Applicant (no new after 2001)

ARM application fee $75 $75 $75 $80 $80 $80 $80 $80 $80 $80

% change 6.7%

ARM certification exam fee $60 $60 $60 $60 $60 $60 $60 $60 $60 $60

% change

ACoM Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Budget

ACoM $195 $195 $195 $195 $195 $200 $200 $200 $200 $200

% change 2.6%

ACoM application fee $75 $75 $75 $80 $80 $80 $80 $80 $80 $80

% change 6.7%

ACoM certification exam fee $60 $60 $60 $60 $60 $60 $60 $60 $60 $60

% change

Associate Member Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Budget

Associate Member $195 $195 $205 $205 $205 $210 $210 $220 $220 $220

% change 5.1% 2.4% 4.8%

AMO Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Budget

AMO Headquarters $440 $440 $440 $440 $440 $450 $450 $475 $475 $475

% change 2.3% 5.6%

AMO Branch $100 $100 $100 $100 $100 $110 $110 $110 $110 $110

% change 10.0%

AMO application fee $405 $405 $405 $425 $425 $425 $425 $425 $425 $425

% change 4.9%

AMO reaccreditation fee $100 $100 $100 $100 $100

Business Line: CredentialingMembership activities, including applications, education, exams, and services associated with earning an IREM credential (CPM, ARM, ACoM, AMO) in the U.S., including credentialing marketing, recruiting, admissions, credentialing education and exam development and delivery, instructor management

Programs within business line:

Classroom Credentialing Education – all courses that earn credit toward the CPM, ARM, ACoM, and AMO credentials delivered in the classroom, promoted to the public, and sponsored by either chapters or IREM Headquarters

Self‐Paced Online Credentialing Education – all courses that earn credit toward the CPM, ARM, ACoM, and AMO credentials delivered online as self‐paced offerings

Corporate and Government Credentialing Courses – all courses that earn credit toward the CPM, ARM, ACoM, and AMO credentials delivered as private in‐house classroom offerings, online offerings, or through licensing agreements to corporate and government clients; also includes enrollments resulting from corporate MOUs and government purchasing programs in public online and classroom offerings

Credentialing Exams – delivery, proctoring, and processing of all credentialing exams for CPM, ARM, and ACoM, including management plans and MPSA

Credentialing Content Development – development of credentialing course curriculum, student and instructor materials, and examinations for all credentialing programs

Instructor Management – management and support of IREM instructors, including instructor recruitment and training, course assignments and scheduling, course and instructor evaluations, instructor presentation skill development – all with a goal of ensuring quality classroom delivery; also includes oversight of MPSA and management plan graders to ensure grading integrity and consistency

Credentialing Marketing – all strategies, campaigns, and tactics for marketing credentialing courses and membership recruitment for all credentialed member categories

CPM – CPM candidate and CPM admissions processing

ARM – ARM admissions processing

AMO – AMO admissions processing for new AMO firms, AMO reaccreditations, and AMO firm changes

ACoM – ACoM admissions processing

Business Line: Credentialing2017 Highlights Reposition and rebrand the ACoM certification as a

program for entry‐level commercial property managers – develop an online course specifically for the ACoM that fulfills the ACoM education requirement (similar to the RES201 for the ARM)

Deepen market penetration of the ARM certification by developing a refreshed RES201 course targeted to entry‐level residential property manager and by expanding the capacity to deliver the RES201 course by increasing number of RES201 instructors in key markets

Target CPM recruitment campaigns to millennials and young professionals

Continue the CPM sponsor program, enhance the Member ROI program, launch a video recruitment series

Release updated versions of CPM credentialing courses (HRS402, MKL404/5/6, FIN402, MNT402, ASM603/4/5) that reflect job analysis findings and incorporate more engaging activities in both classroom and online versions

Refresh ETH800 course with updated video scenarios Review, revise, and update the CPM, ARM, and ACoM

certification exams and MPSA exam to incorporate findings from job analysis and ensure exam rigor

Explore alternate vehicles for delivering MPSA and certification exams, including online testing options

Course and exam tuitions and fees remain at same regular and member rates; for classroom course, tuitions increase by $100 for those who register fewer than 30 days out, with the goal of increasing registrations, improving course shipment practices, and minimizing course cancellations; chapter sponsors will receive $50 of the $100 fee increase

2012 2013 2014 2015 2016F 2017BIncome $2,447,857 $2,430,655 $2,536,825 $2,566,755 $2,672,434 $2,812,071

Direct Expense $955,474 $928,477 $1,030,007 $854,944 $886,367 $985,856

$‐

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

BUSINESS LINE: CREDENTIALING


2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

2017-B vs 2016-F

% Variance

Fav/Unfav)

2017-B vs 2016-F

CLASSROOM - CREDENTIALING CREDENTIALINGDirect Income 706,121 760,017 745,815 745,815 799,727 53,912 7.2%

Direct Expenses (353,432) (265,726) (280,815) (280,815) (301,952) (21,137) -7.5%


SELF-PACED ONLINE CREDENTIALING CREDENTIALINGDirect Income 1,034,957 1,051,616 1,065,280 1,065,280 1,113,649 48,369 4.5%

Direct Expenses (425) (700) (700) (150) (2,350) (2,200) -1466.7%


CORPORATE & GOVERNMENT COURSES CREDENTIALINGDirect Income 181,066 200,000 200,000 194,000 209,000 15,000 7.7%

Direct Expenses (26,573) (57,150) (57,150) (53,300) (59,700) (6,400) -12.0%


CREDENTIALING EXAMS CREDENTIALINGDirect Income 361,335 406,371 372,269 372,269 381,285 9,016 2.4%

Direct Expenses (101,941) (118,350) (102,850) (102,850) (94,069) 8,781 8.5%


CONTENT DEVELOPMENT CREDENTIALINGDirect Expenses (13,268) (21,200) (21,200) (19,600) (60,550) (40,950) -208.9%


INSTRUCTOR MANAGEMENT CREDENTIALINGDirect Expenses (49,241) (20,525) (39,775) (34,321) (78,920) (44,599) -129.9%


CREDENTIALING MARKETING CREDENTIALINGDirect Expenses (261,035) (347,500) (339,500) (344,000) (336,000) 8,000 2.3%


CPM CREDENTIALINGDirect Income 233,833 232,590 232,590 232,590 249,750 17,160 7.4%

Direct Expenses (25,293) (24,500) (24,500) (26,266) (26,000) 266 1.0%


ARM CREDENTIALINGDirect Income 27,123 31,680 31,680 31,680 32,680 1,000 3.2%

Direct Expenses (14,260) (14,900) (14,900) (14,900) (15,600) (700) -4.7%

Direct Contribution 12,863 16,780 16,780 16,780 17,080 300 1.8%

AMO CREDENTIALINGDirect Income 21,600 31,000 31,000 30,000 25,100 (4,900) -16.3%

Direct Expenses (7,583) (7,100) (7,100) (7,580) (8,100) (520) -6.9%

Direct Contribution 14,017 23,900 23,900 22,420 17,000 (5,420) -24.2%

ACoM CREDENTIALINGDirect Income 720 1,200 800 800 880 80 10.0%

Direct Expenses (1,895) (1,850) (1,450) (2,585) (2,615) (30) -1.2%

Direct Contribution (1,175) (650) (650) (1,785) (1,735) 50 2.8%

Net Income/(Loss) 1,711,811 1,834,973 1,789,493 1,786,067 1,826,214 40,147 2.2%


Business Line: Knowledge ProductsDevelopment, delivery, marketing, and sales of all knowledge products exclusive of credentialing courses – includes classroom and online seminars, publications, JPM, Income/Expense Analysis, webinars, tutorials, news and other content, third‐party contract work, and industry research.

Programs within business line:

Non‐credentialing Education – online and classroom courses and virtual seminars that do not earn credit toward an IREM credential

Journal of Property Management – published bi‐monthly in digital and print, IREM’s primary communications vehicle, complimentary to members, some paid subscribers

Income/Expense Reports – five statistical reports based on operating income and expense data submitted by members and nonmembers; available in print, e‐book, online lab formats, by metro areas, and through corporate licenses; CPMs and data contributors receive free digital reports or pay only $50 for print copies

Publications – books, white papers, reports on industry‐specific topics, available in print and digital formats

Knowledge and Content Services – both for‐sale knowledge products and complimentary and member service products, including webinars, forms and checklists, weekly newsletter, tutorials, thought leadership

Knowledge Products Marketing – strategies, campaigns, and tactics for marketing of non‐credentialing courses, webinars, and content services

Contract Work – development of education curriculum or delivery of other services under third‐party contracts with outside organizations, such as government and NAR

Business Line: Knowledge Products

2012 2013 2014 2015 2016F 2017BDirect Income $707,650 $544,396 $589,151 $650,023 $614,058 $619,308

Direct Expense $538,038 $522,266 $675,460 $572,829 $574,299 $636,275

$‐

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000 2017 Highlights Launch a series of virtual seminars offering in‐depth

industry education and presented on webinar platform; 10 seminars are planned

Develop meaningful content to continue to position IREM as a thought leader in real estate asset management, leadership development, technology, and best practices

Withdraw from IREM Headquarters obtaining state CE approvals for IREM courses, while supporting those chapters that elect to obtain CE on their own

Produce revision of Principles of Real Estate Management, 17th edition, in both print version and interactive digital version

BUSINESS LINE: KNOWLEDGE PRODUCTS


2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

2017-B vs 2016-F

% Variance

Fav/Unfav)

2017-B vs 2016-F

NON-CREDENTIALING EDUCATION KNOWLEDGE PRODUCTSDirect Income 86,895 109,060 89,998 80,651 92,759 12,108 15.0%

Direct Expenses (4,208) (14,835) (13,960) (11,760) (11,635) 125 1.1%


JOURNAL OF PROPERTY MANAGEMENT (JPM) KNOWLEDGE PRODUCTSDirect Income 11,178 24,291 12,343 14,343 14,403 60 0.4%

Direct Expenses (221,228) (210,633) (210,460) (209,714) (209,698) 16 0.0%

Direct Contribution (210,050) (186,342) (198,117) (195,371) (195,295) 76 0.0%

STATE CONTINUING EDUCATION KNOWLEDGE PRODUCTSDirect Expenses (7,284) (18,180) (9,225) (3,920) (4,000) (80) -2.0%


INCOME & EXPENSE KNOWLEDGE PRODUCTSDirect Income 356,383 357,531 357,531 348,064 357,333 9,269 2.7%

Direct Expenses (161,598) (143,300) (141,300) (141,300) (145,605) (4,305) -3.0%


PUBLICATIONS KNOWLEDGE PRODUCTSDirect Income 94,578 121,491 114,585 90,000 119,539 29,539 32.8%

Direct Expenses (63,800) (62,313) (62,138) (62,605) (88,377) (25,772) -41.2%


KNOWLEDGE & CONTENT SERVICES KNOWLEDGE PRODUCTSDirect Income 9,988 62,675 12,675 13,500 15,275 1,775 13.1%

Direct Expenses (108,526) (170,500) (120,500) (135,000) (164,360) (29,360) -21.7%


MARKETING - KNOWLEDGE PRODUCTS KNOWLEDGE PRODUCTSDirect Expenses (5,673) (12,000) (9,000) (9,000) (11,000) (2,000) -22.2%


CONTRACT WORK KNOWLEDGE PRODUCTSDirect Income 91,000 40,000 47,000 67,500 20,000 (47,500) -70.4%

Direct Expenses (512) (2,100) (2,100) (1,000) (1,600) (600) -60.0%

Direct Contribution 90,488 37,900 44,900 66,500 18,400 (48,100) -72.3%

Net Income/(Loss) 77,193 81,187 65,448 39,759 (16,966) (56,725) -142.7%


Business Line: Chapter LeadershipPrograms and services that support chapters and RVPs in the U.S. through the local member network

Programs within this business line:

Chapter Support – Administrative support to IREM chapters, chapter volunteer leaders, and IAEs, including IAE work group, IAE symposium, chapter recognition program, chapter president and IAE training; also includes chapter website program

Chapter Presidents Subsidy – financial assistance through reimbursement of airfare or other travel expense to chapters that send incoming presidents to the IREM Global Summit in Chicago in October 2017

Chapter Visits – scheduling and support of and communications with IREM chapters that are visited by IREM senior leaders; approximately 40% of chapters are visited each year

RVP Travel – financial and administrative support for RVPs to visit chapters within their region; also includes RVP training

Business Line: Chapter Leadership2017 Highlights Provide continued high‐level support of chapters and

regional vice presidents in the U.S., including visits to chapters by national officers, RVP visits to and support of chapters, and IAE professional development

2012 2013 2014 2015 2016F 2017BDirect Income $71,175 $75,275 $90,365 $86,598 $90,090 $86,075

Direct Expense $213,237 $222,398 $210,653 $213,869 $209,155 $210,040

$‐

$50,000

$100,000

$150,000

$200,000

$250,000

BUSINESS LINE: CHAPTER LEADERSHIP


2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

2017-B vs 2016-F

% Variance

Fav/Unfav)

2017-B vs 2016-F

CHAPTER SUPPORT CHAPTER LEADERSHIPDirect Income 86,598 90,090 90,090 90,090 86,075 (4,015) -4.5%

Direct Expenses (110,203) (111,215) (114,715) (114,715) (108,410) 6,305 5.5%


CHAPTER PRESIDENTS SUBSIDY CHAPTER LEADERSHIPDirect Expenses (28,015) (27,450) (27,450) (27,450) (28,800) (1,350) -4.9%


CHAPTER VISITS CHAPTER LEADERSHIPDirect Expenses (35,174) (31,130) (31,130) (31,130) (32,230) (1,100) -3.5%


RVP TRAVEL CHAPTER LEADERSHIPDirect Expenses (40,476) (40,860) (40,860) (35,860) (40,600) (4,740) -13.2%


Net Income/(Loss) (127,271) (120,565) (124,065) (119,065) (123,965) (4,900) -4.1%


Business Line: Volunteer LeadershipPrograms and services that support the volunteer leadership team in executing corporate strategy, leadership development, and governance activities


Strategic Planning – strategic planning, research, and scanning, including the annual executive committee retreat in Chicago; research to support strategic decision‐making and monitoring; task forces and related activities to support the execution of the strategic plan

Leadership Recognition and Support – identification, support, and recognition of IREM volunteer leaders; includes officer spouse travel and related expenses

Committee and Board Support – administrative and governance support for IREM’s committees and boards, including both virtual meetings and engagement as well as in‐person meetings that will take place during IREM Global Summit in October

Leadership and Officer Briefings – meetings conducted to oversee IREM governance, onboard and train new officers, conduct briefings and other business matters; includes both virtual and in‐person meetings

Business Line: Volunteer Leadership2017 Highlights With a single national governance meeting,

committee and board activity will occur primarily through virtual meetings, and the overall cost of governance drops

Updated and refreshed 2017‐2019 strategic plan anticipated as outcome of January executive committee retreat

2012 2013 2014 2015 2016F 2017BDirect Income $‐ $‐ $‐ $‐ $‐ $‐

Direct Expense $310,251 $391,589 $420,172 $350,467 $472,723 $393,142

$‐

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

BUSINESS LINE: VOLUNTEER LEADERSHIP


2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

2017-B vs 2016-F

% Variance

Fav/Unfav)

2017-B vs 2016-F

STRATEGIC PLANNING VOLUNTEER LEADERSHIPDirect Expenses (47,565) (112,000) (114,480) (125,321) (98,040) 27,281 21.8%


LEADERSHIP RECOGNITION & SUPPORT VOLUNTEER LEADERSHIPDirect Expenses (84,832) (101,800) (107,985) (95,888) (126,395) (30,507) -31.8%


COMMITTEE & BOARD SUPPORT VOLUNTEER LEADERSHIPDirect Expenses (160,512) (202,845) (194,286) (197,457) (109,147) 88,310 44.7%


LEADERSHIP & OFFICER BRIEFINGS VOLUNTEER LEADERSHIPDirect Expenses (57,557) (49,620) (52,565) (54,057) (59,560) (5,503) -10.2%


Net Income/(Loss) (350,467) (466,265) (469,316) (472,723) (393,142) 79,581 16.8%


Business Line: External RelationsPrograms and initiatives that foster external relationships with real estate management companies, industry associations and leaders, academic institutions, government bodies, and vendors


Corporate Outreach – participation in industry and corporate events and tradeshows, attendance at NAR national meetings and participation in NAR committees, Commercial Summit, and business development initiatives directed toward corporate and government clients

Academic, Young Professional, Diversity Outreach – three outreach programs: (1) academic outreach to colleges and universities, academic MOUs and advisory board roles, student and academic membership programs (exclusive of dues revenue), career support materials, and support of chapter college outreach programs and IREM student clubs through program overseen by Student and Academic Advisory Board; (2) diversity outreach to attract and engage an ethnically diverse market to IREM through Diversity Advisory Board; and (3) young professional outreach, aimed at attracting and engaging young property professionals (under 35) to IREM

Government Relations – an agency and regulatory program addressing notices, rules, and orders concerning federal law; a state and municipal affairs program addressing legislative and legal issues and encouraging statehouse visits; a federal advocacy program addressing legislative and legal issues, including an In‐District Visit program for grassroots lobbying of U.S. Congressmen, Federal Housing Advisory Board, and Federal Advocacy Board

Corporate Marketing and Public Relations – initiatives designed to promote IREM as an organization, the IREM brand, and the combined programs and services of the organization

Vendor Relations ‐ vendor relationships and sponsorships that offer access to IREM members, including Industry Partners, corporate sponsors, online and JPM advertising, conference exhibitors/sponsors, buyer's guide royalties, REME Award sponsors, and I/E sponsorships and advertising

Industry Awards – REME Awards program recognizing innovative business practices by property management companies and practitioners, culminating in an awards presentations at IREM Global Summit

Business Line: External Relations2017 Highlights Commercial Summit to be held in January and capitalize

on momentum gained from initial summit in 2016

Expanded staffing in business development area will be aimed at strengthening depth and scope of relationships with corporate real estate companies and vendors

Continued attention to college and university engagement and diversity programs, with additional outreach to HBCUs and to high school students

Engagements with young professionals to be expanding and will include a “30 under 30” initiative

Launch of the REstart program through IREM chapters

Government relations to shift its federal focus to in‐district meetings as primary vehicle for members to connect with Congressional leaders, supplemented with launch of Federal Advocacy Board positioned to speak on behalf of IREM in DC

Local and state government affairs issues to be supported by statehouse visit program

Expansion of corporate PR and communications efforts to position IREM as an organizational thought leader and its leaders as subject matter experts; includes participation in NAREE (National Association of Real Estate Editors) conference

In its third year, the REME Awards is targeting a 25% increase in submissions2012 2013 2014 2015 2016F 2017B

Direct Income $277,921 $342,220 $355,439 $276,849 $333,250 $398,360

Direct Expense $256,620 $346,756 $348,887 $312,145 $382,884 $402,475

$‐

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

BUSINESS LINE: EXTERNAL RELATIONS


2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

2017-B vs 2016-F

% Variance

Fav/Unfav)

2017-B vs 2016-F

CORPORATE OUTREACH EXTERNAL RELATIONSDirect Expenses (84,949) (133,055) (116,555) (113,605) (139,050) (25,445) -22.4%


ACADEMIC, PROFESSIONAL & DIVERSITY EXTERNAL RELATIONSDirect Income 36,473 48,930 48,930 47,100 56,360 9,260 19.7%

Direct Expenses (55,577) (65,940) (65,940) (65,755) (89,230) (23,475) -35.7%


GOVERNMENT RELATIONS EXTERNAL RELATIONSDirect Expenses (35,496) (42,872) (50,048) (44,614) (67,345) (22,731) -51.0%


CORPORATE MARKETING & PUBLIC RELATIONS EXTERNAL RELATIONSDirect Expenses (50,326) (77,950) (67,650) (65,150) (71,850) (6,700) -10.3%


VENDOR RELATIONS EXTERNAL RELATIONSDirect Income 240,376 325,500 279,510 286,150 342,000 55,850 19.5%

Direct Expenses (47,010) (63,100) (57,030) (54,160) (3,100) 51,060 94.3%


INDUSTRY AWARDS EXTERNAL RELATIONSDirect Income - - - - #DIV/0!

Direct Expenses (38,787) (37,500) (37,500) (39,600) (31,900) 7,700 19.4%


Net Income/(Loss) (35,296) (45,987) (66,283) (49,634) (4,115) 45,519 91.7%


Business Line: National EventsProduction and delivery of Global Summit in October plus four U.S. regional meetings


Global Summit ‐ a retooling of the fall conference with an emphasis on broadening the relevance of professional education and networking opportunities to IREM's global members and partners; engaging practitioners at all levels with purposeful focus on asset managers and young professionals will continue; IREM governance meetings will remain an integral component

Regional Meetings ‐ new in 2017, the regional meetings will focus on strengthening the IREM chapter network by delivering programming focused on developing chapter leaders, the sharing of best practices, and the IREM strategic plan and themes; participants will also have the opportunity to attend regional industry events, conveniently co‐located with the chapter program

Business Line: National Events2017 Highlights The Fall Leadership Conference will become the

Global Summit in 2017, taking place in IREM’s hometown of Chicago with attendance expected to top 700

The kick‐off of four regional meetings set for New York City, Minneapolis, Atlanta, and Orange County – all of which will combine chapter leadership, networking , and industry‐related educational programming

2012 2013 2014 2015 2016F 2017BDirect Income $430,118 $417,169 $425,795 $439,514 $474,250 $485,560

Direct Expense $556,111 $562,825 $596,981 $576,782 $642,193 $697,125

$‐

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

BUSINESS LINE: NATIONAL EVENTS


2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

2017-B vs 2016-F

% Variance

Fav/Unfav)

2017-B vs 2016-F

LEADERSHIP & LEGISLATIVE SUMMIT (LLS) NATIONAL EVENTSDirect Income 155,605 160,150 159,570 150,535 (150,535) -100.0%

Direct Expenses (217,890) (235,480) (237,780) (220,839) 220,839 100.0%

Direct Contribution (62,285) (75,330) (78,210) (70,304) 70,304 100.0%

IREM GLOBAL SUMMIT NATIONAL EVENTSDirect Income 283,909 322,530 322,465 323,715 355,610 31,895 9.9%

Direct Expenses (358,892) (402,275) (421,140) (421,354) (491,192) (69,838) -16.6%


REGIONAL MEETINGS NATIONAL EVENTSDirect Income - - - 129,950 129,950 #DIV/0!

Direct Expenses - - - (205,933) (205,933) #DIV/0!

Direct Contribution - - - (75,983) (75,983) #DIV/0!

Net Income/(Loss) (137,268) (155,075) (176,885) (167,943) (211,565) (43,622) -26.0%


Business Line: International Programs and activities related to international outreach, including dues, membership admissions and services, chapter services, international outreach and travel, international education, with international defined as all activity outside of the United States


International Dues ‐ represents dues for all categories of membership outside the US; expense is service fee paid to international partners/chapters for collecting dues on IREM's behalf

International Membership ‐ comprises all membership and certification exam activity, chapter and member services, travel outside the US by staff and leaders and Canadian RVP, IREM participation in various international standards coalitions, and promotion of IREM on the global platform per the 2015‐16 strategic plan

International Education ‐ delivery of IREM education outside the US, reflecting revenues from course royalties, licensing fees, and reimbursable costs when US instructors teach internationally, and expenses attributable primarily to instructor costs and course translation

Business Line: International 2017 Highlights Slight upward trend in overall revenues from

international programs, majority of which come from two countries – Canada and Japan

Continued growth in overall number of CPMs and new CPM approvals, offset by lower retention rates than in U.S., budgeted to end the year with 1,849 members, or 8.7% of total IREM membership

Incorporates global outreach and branding through event participation (MIPIM, ProEstate, ExpoReal) and coalitions (IPMS, IES)

Classroom education to be offered in Brazil, Bulgaria, Canada, China, India, Japan, Kazakhstan, Korea, Russia, Ukraine, and via online courses to English‐speaking students in other countries

Complies with this business line’s policy of revenues covering all direct operating plus dedicated staff expenses

2012 2013 2014 2015 2016F 2017BDirect Income $617,784 $583,514 $684,466 $620,840 $691,461 $772,305

Direct Expense $379,603 $296,212 $342,368 $272,537 $336,105 $400,042

$‐

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

BUSINESS LINE: INTERNATIONAL


2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

2017-B vs 2016-F

% Variance

Fav/Unfav)

2017-B vs 2016-F

INTERNATIONAL DUES INTERNATIONALDirect Income 329,556 326,095 332,000 332,000 365,575 33,575 10.1%

Direct Expenses (24,201) (23,148) (25,000) (25,000) (24,743) 257 1.0%


INTERNATIONAL MEMBERSHIP INTERNATIONALDirect Income 76,953 118,465 100,420 97,420 99,265 1,845 1.9%

Direct Expenses (163,003) (237,600) (216,600) (213,050) (245,690) (32,640) -15.3%


INTERNATIONAL EDUCATION INTERNATIONALDirect Income 214,331 320,047 304,417 262,041 307,465 45,424 17.3%

Direct Expenses (85,333) (151,635) (130,200) (98,055) (129,609) (31,554) -32.2%


Net Income/(Loss) 348,303 352,224 365,037 355,356 372,263 16,907 4.8%


Business Line: Business Development for Members Programs and initiatives to promote the expertise of members and increase their visibility and business opportunities, including credential awareness, AMO services, IREM Jobs program, and sustainability program


Credential Awareness – activities to promote the expertise of and hiring of credentialed members; also includes image study conducted every 3‐5 years to measure awareness of credentials among owners, investors, and employers who hire members and member firms, last conducted in 2015

Jobs Program – online jobs board, housed on irem.org in Career Center and powered by Boxwood

AMO Services – promotion of AMO‐accredited companies to client market; communication, services, and networking targeted to executive CPMs with AMO firms

Sustainability – IREM Certified Sustainable Property certification marketing, sales, and administration; other sustainability education and related activities and outreach supported by Yardi energy efficiency grant, including online courses, conference sessions, chapter workshops, webinars publications, and attendance at Greenbuild and similar sustainability‐related events

Business Line: Business Development for Members 2017 Highlights A major organization‐wide branding initiative will be

undertaken in 2017, funded largely through the credential awareness budget and launched in October at the IREM Global Summit

Chapter co‐op advertising program is being phased out due to drop‐off in participation; to be replaced by more regional advertising

Enhancement of AMO services, including more robust “why hire an AMO” promotional efforts, expanded outreach to customers of AMO firms, and special programming for Executive CPMs at Global Summit

Anticipated Yardi sustainability grant will fund development of sustainability education and participation in USGBC and GRESB

IREM Certified Sustainability Property program aiming for 110 new certified properties in 2017

2012 2013 2014 2015 2016F 2017BDirect Income $50,168 $57,498 $286,782 $284,161 $294,100 $325,200

Direct Expense $174,782 $195,985 $249,135 $260,602 $258,750 $277,200

$‐

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

BUSINESS LINE: BUSINESS DEVELOPMENT FOR MEMBERS


2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

2017-B vs 2016-F

% Variance

Fav/Unfav)

2017-B vs 2016-F

CREDENTIAL AWARENESS BUSINESS DEVELOPMENT FOR MEMBERSDirect Income 1,000 7,000 2,000 2,000 - (2,000) -100.0%

Direct Expenses (197,531) (181,500) (173,000) (173,000) (177,000) (4,000) -2.3%


JOBS PROGRAM BUSINESS DEVELOPMENT FOR MEMBERSDirect Income 79,085 76,000 78,000 77,000 78,000 1,000 1.3%

Direct Expenses - (1,700) (1,700) (1,700) (1,150) 550 32.4%


AMO SERVICES BUSINESS DEVELOPMENT FOR MEMBERSDirect Income 576 - - 100 (100) -100.0%

Direct Expenses - (19,000) (22,000) (22,000) (31,500) (9,500) -43.2%

Direct Contribution 576 (19,000) (22,000) (21,900) (31,500) (9,600) -43.8%

SUSTAINABILITY INTIATIVES BUSINESS DEVELOPMENT FOR MEMBERSDirect Income 203,500 250,000 230,000 215,000 247,200 32,200 15.0%

Direct Expenses (63,072) (72,900) (72,900) (62,050) (67,550) (5,500) -8.9%


Net Income/(Loss) 23,559 57,900 40,400 35,350 48,000 12,650 35.8%


Business Line: Corporate OperationsAdministrative costs of running the organization, including all salaries and benefits


Finance and Accounting – all accounting activity including payroll, state and federal tax returns, annual audit, bank reconciliations, bank and credit card fees, monthly financial statements, accounts payable and accounts receivable transactions, inventory and financial controls; also incudes service fees for processing of chapter dues for chapters that elect this service

Fulfillment – provides for the fulfillment of orders from off‐site warehouse, including postage and handling

General Office – provides a working environment and other services for staff, including office space, walk‐up copiers, and mail room functions; IREM occupies 15,331 sq. ft. of office space at a current rate of $28.33/foot plus CAM and real estate taxes

Risk Management – provides comprehensive insurance coverage for the Institute and general liability insurance coverage for the chapters

Information Technology – provides all aspects of IT support including desktop, server, email, website, AMS, LMS, CMS, internet, and phone system; maintains all licenses and support contracts for all operating systems

Human Resources – ongoing activities that support staff recruitment, talent selection, professional growth, and recognition and support IREM’s goal of promoting a strong organizational culture by selecting the best talent, minimizing turnover, and increasing productivity

Executive Office – covers the costs associated with the operation of the executive office and CEO activity

Legal – fees for general legal work not associated with a specific program

Trademarks – involves renewal and policing of existing marks, pursuing infringement cases, and applying for new registrations as may be required

Contingency – by policy, approximately 1% of operating expenses are held in reserve for contingent expenses that may occur during the year

Foundation – represents IREM's management of the IREM Foundation under a third‐party administrative services agreement

Innovation Fund – new strategic development/incubator fund established by the executive committee to support worthwhile "venture capital" opportunities that may evolve as the year unfolds but cannot be predicted when the budget is prepared.

Miscellaneous – miscellaneous income attributed to stale‐dated checks and earning of American Express points

Salaries and Wages – all compensation including salaries and salary adjustments, salary erosion, and earned bonuses for both full‐time and part‐time/temporary staff

Benefits – comprises all employee benefits, including social security, medical insurance, pension, and related benefits

Business Line: Corporate Operations2017 Highlights Corporate operations represents two‐

thirds of overall operating expense budget, the majority comprising salary and benefits

Total FTEs in 2017 are budgeted at 67, with salaries and benefits budget representing 51% of total operating expenses

HQ collected dues on behalf of 49 chapters in 2016; this number is expected to increase slightly in 2017

2012 2013 2014 2015 2016F 2017BDirect Income $260,391 $242,110 $67,899 $84,158 $96,685 $117,530

Direct Expense $7,351,457 $7,296,220 $7,569,051 $7,757,135 $8,096,967 $8,333,934

$‐

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

BUSINESS LINE: CORPORATE OPERATIONS


2016 Forecast

(6 + 6) * 2017 Budget

Variance

Fav/(Unfav)

2017-B vs 2016-F

% Variance

Fav/Unfav)

2017-B vs 2016-F

FINANCE & ACCOUNTING CORPORATE OPERATIONSDirect Income 16,547 40,000 26,000 24,919 26,000 1,081 4.3%

Direct Expenses (284,548) (299,692) (282,430) (285,717) (290,750) (5,033) -1.8%


FULFILLMENT CORPORATE OPERATIONSDirect Expenses (10,332) (12,292) (10,570) (10,570) (11,340) (770) -7.3%


GENERAL OFFICE CORPORATE OPERATIONSDirect Expenses (627,702) (628,057) (626,386) (627,583) (628,480) (897) -0.1%


RISK MANAGEMENT CORPORATE OPERATIONSDirect Expenses (103,924) (105,759) (93,216) (94,922) (98,967) (4,045) -4.3%


INFORMATION TECHNOLOGY CORPORATE OPERATIONSDirect Expenses (428,768) (435,500) (441,500) (452,098) (565,750) (113,652) -25.1%


HUMAN RESOURCES CORPORATE OPERATIONSDirect Expenses (76,335) (81,370) (78,370) (77,625) (82,160) (4,535) -5.8%


EXECUTIVE OFFICE CORPORATE OPERATIONSDirect Expenses (17,424) (20,000) (18,600) (16,347) (16,905) (558) -3.4%


LEGAL CORPORATE OPERATIONSDirect Expenses (364) (3,000) (2,000) (2,000) (1,000) 1,000 50.0%

Direct Contribution (364) (3,000) (2,000) (2,000) (1,000) 1,000 50.0%

TRADEMARKS CORPORATE OPERATIONSDirect Expenses (4,081) (13,100) (14,444) (10,414) (13,500) (3,086) -29.6%


CONTINGENCY CORPORATE OPERATIONSDirect Expenses - (125,000) (125,000) (125,000) (125,000) - 0.0%

Direct Contribution - (125,000) (125,000) (125,000) (125,000) - 0.0%

FOUNDATION CORPORATE OPERATIONSDirect Income 63,654 65,564 65,564 65,564 67,530 1,966 3.0%


INNOVATION FUND CORPORATE OPERATIONSDirect Expenses (85) (25,000) (25,000) (25,000) (25,000) - 0.0%

Direct Contribution (85) (25,000) (25,000) (25,000) (25,000) - 0.0%

MISCELLANEOUS CORPORATE OPERATIONSDirect Income 3,957 4,000 4,000 6,202 24,000 17,798 287.0%


SALARIES & WAGES CORPORATE OPERATIONSDirect Expenses (4,608,807) (4,623,341) (4,611,351) (4,665,006) (4,678,677) (13,671) -0.3%


BENEFITS CORPORATE OPERATIONSDirect Expenses (1,594,765) (1,706,473) (1,699,091) (1,704,685) (1,796,406) (91,721) -5.4%


Net Income/(Loss) (7,672,977) (7,969,020) (7,932,394) (8,000,282) (8,216,404) (216,122) -2.7%


PROGRAM: CAPITAL EXPENDITURES 2015 Actual 2016 Budget 2016 Recast 2016 Forecast 2017 Budget

KNOWLEDGE PRODUCTS

New Publications #772, #782, #783, #975-#976, #990 (33,669)$ -$ -$ (15,000)$ (15,250)$

Subtotals: Knowledge Products (33,669)$ -$ -$ (15,000)$ (15,250)$

CORPORATE OPERATIONS

IT: Replacement PC's/iPads for Staff VP/Directors (20,874)$ -$ -$ -$ -$

IT: Server & equipment for Hot Standby (30,046)

IT: AMS Application Upgrade to 7.5 part two (38,675) - -

2015 Additions:

IT: New office electronics (34,039) - - - -

IT:Kwiktag Upgrade (4,000)

IT: Backup software (9,979) - - - -

General office: Furniture & Fixtures for the new lease (406,003) - - - -

General Office: Buildout cost of 5th floor over TI allowance (148,991) - -

General office: Signage (7,828)

2016 Additions:

IT: Servers (2) @$17,500 each (35,000) (35,000) - -

General office: Furniture & improvements (25,000) (25,000) (32,494) -

2017 Additions: (In CAPEX budget)

Great Plains Upgrade (12,000)

New lighting for video room (3,500) IT Servers (2) - $22,500 each (45,000)

Subtotals: Corporate Operations (700,435)$ (60,000)$ (60,000)$ (32,494)$ (60,500)$

TOTAL CAPITAL EXPENDITURES (734,103)$ (60,000)$ (60,000)$ (47,494)$ (75,750)$

Depreciation & Amortization:

Historic Cost Prior A/D 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total Depr

Amortization - Rent

Buildout 9/1/2015 10 yr 148,991.28$ 1372 4,966.38$ 14,899.13$ 14,899.13$ 14,899.13$ 14,899.13$ 14,899.13$ 14,899.13$ 14,899.13$ 14,899.13$ 14,899.13$ 9,932.73$ 148,991.28$

Furniture - Lease 8/15/2015 - 10 yr 406,002.96 Class 11 (1360) 20,300.15 40,600.30 40,600.30 40,600.30 40,600.30 40,600.30 40,600.30 40,600.30 40,600.30 40,600.30 20,300.11 406,002.96

-

Amortization - Rent 554,994.24$ -$ 25,266.53$ 55,499.43$ 55,499.43$ 55,499.43$ 55,499.43$ 55,499.43$ 55,499.43$ 55,499.43$ 55,499.43$ 55,499.43$ 30,232.84$ 554,994.24$

Depreciation & Amortization:

AMS System 1/1/2011 1,043,839.65$ 1185 695,893.08$ 173,973.28$ 173,973.29$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 1,043,839.65$

AMS - Membership upgrade 1/1/2012 25,495.00 1185-2 15,297.00 5,099.00 5,099.00 - - - - - - - - - 25,495.00

AMS upgrade to 7.51 4/1/2015 3 yr 225,458.12 1340 39,646.33 56,364.53 56,364.53 56,364.53 16,718.20 - - - - - - 225,458.12

Great Plains 1/1/2011 105,654.76 1186 70,436.55 17,609.13 17,609.08 - - - - - - - - - 105,654.76

Quik Tag Document sytem 2/1/2011 21,087.43 1156-1 21,087.43 - - 21,087.43

Quik Tag upgrade 2015 8/15/15 4,000.00 1156-2 555.56 1,333.33 1,333.33 777.78 4,000.00

KMX integration w/ AMS 5/1/2012 37,200.00 1187-1 20,918.15 7,848.55 7,848.55 584.75 - - - - - - - - 37,200.00

I/E Upgrade 10/2010 837,733.90 1136-1139, 1269 707,370.52 129,333.79 1,029.59 - - - - - - - - - 837,733.90

Website 06/2013 379,421.15 1265 Class 10 189,710.58 126,473.72 63,236.85 - - - - - - - - - 379,421.15

Website Enhancements 11/2014 43,307.79 1265-3 Class 10 2,405.98 14,435.93 14,435.93 12,029.95 - - - - - - - - 43,307.79

Office & Other equipment 325,602.95 Class 1 253,000.70 15,505.38 19,889.24 14,568.43 11,319.59 6,930.67 4,388.94 - - - - - 325,602.95

Computer Equipment (2012 onwards) 202,515.18 Class 9 81,854.98 55,899.29 38,524.64 21,655.34 4,580.93 - - - - - - - 202,515.18

Disposed assets -2015 20,487.34 17,305.89 3,181.45 20,487.34

Disposed assets -2015 (20,487.34) (20,487.34) (20,487.34)

2016 Actual Purchases:

2016 Computer Equipment purch 22,506.88 6,543.15 7,502.28 7,502.28 959.17 22,506.88

2016 Furniture 3,986.88 9 yrs 369.18 443.04 443.04 443.04 443.04 443.04 443.04 443.04 443.04 73.38 3,986.88

2016 Budgeted/forecasted adds:

IT: Servers (2) @$17,500 each - 3 yrs - July 1 - - - - -

General office: Replacement furniture & improvements 6,000.00 3 yrs - July 1 1,000.00 2,000.00 2,000.00 1,000.00 6,000.00

CAPEX - 2016 32,493.76$ (27,506.24)$

difference over recast/budget

2017 adds budgeted:

Great Plains upgrade 12,000.00 5 year Feb 1 - 2,200.00 2,400.00 2,400.00 2,400.00 2,400.00 200.00 12,000.00

New lighting for video room 3,500.00 3 yrs - July 1 - 583.33 1,166.67 1,166.67 583.33 3,500.00

IT: Servers (2) @$22,500 each 45,000.00 3 yrs - July 1 7,500.00 15,000.00 15,000.00 7,500.00 45,000.00

- 3 yrs - July 1 - - - - -

CAPEX - 2017 60,500.00$

Depreciation & Amortization 3,344,309.69$ 2,054,793.52$ 589,561.41$ 407,256.36$ 126,764.98$ 101,554.82$ 44,617.75$ 15,315.31$ 2,843.04$ 643.04$ 443.04$ 443.04$ 73.38$ 3,344,309.69$

Combined Depreciation/Rent 3,899,303.93$ -$ 2,054,793.52$ 614,827.94$ 462,755.79$ 182,264.41$ 157,054.25$ 100,117.18$ 70,814.74$ 58,342.47$ 56,142.47$ 55,942.47$ 55,942.47$ 30,306.22$ 3,899,303.93$

actual forecast

2017 operating plan and budget: operating income …...

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