At the close of the recent AAPG Annual Convention and Exhibition in Denver I walked around and thanked as many exhibitors as I could. As I talked to them, I asked their views on current industry economic conditions, since by appearance, they all had likely been through two or three downturns before.
Without fail, they all said “there will be the other side of this slump,” and whether it comes in six months or two years, they are working to be prepared for when it comes – and surviving until then.
Your Executive Committee (EC) also is preparing for the coming year, and recently reviewed and approved the fiscal year 2016 budget.
The staff at headquarters and in the global offices annually prepare the proposed budgets – starting with a clean slate – by building the expected revenue and expenses for the many programs we provide to you, the members.
This budget is then presented to the EC, down to the individual program items and the capital and resources needed to continue the established and any new programs.
The charts you see here summarize our expected sources of revenue and expenses.
The expense focus is on member service, particularly education, meetings and publishing. Conferences provide the majority of revenue, and your dues provide 11 percent of our revenue.
Several years ago the Graduated Dues program was created for those in career transitions, and we encourage members to use these reduced dues if needed.
Advertising, such as what you’ll find on the following EXPLORER pages and on our website at aapg.org also provides a steady revenue stream, although down from earlier years.
The financial health of our Association is good, but continuation of successful Member programs and conservative projections of income gave us a fiscal 2016 budget with almost a 10 percent shortfall.
The EC has worked to reduce capital and/or defer planned expenses, without cancelling or altering the most important programs. This work will continue throughout the year, as we constantly monitor and modify expenses to match our revenues.
A big part of AAPG’s service to Members and to the profession is our publishing program.
Of course, the publishing world based on printed paper is rapidly changing, including the economics of books.
We will continue publishing Memoirs in hardcopy while still investigating reducing costs and inventory, and increasing royalty revenue from electronic publication sources. We receive substantial royalties from Geoscience World for recent BULLETINs, and royalty and service payments from AAPG and other related publications included in Datapages.
The new Datapages Exploration Objects (DEO) georeferenced maps, cross-sections and seismic lines, on which you receive a monthly email update, grows as a revenue source and as an archive.
The EXPLORER continues as a useful information source, and revenue-generator as the leading large-format industry publication. We also began the Interpretation journal jointly with SEG in 2013, and it already provides revenue while growing in popularity.
Our education programs have grown in number and global coverage – the popularity of one- and two-day workshops have added to the traditional multi-day topical and multi-topic sessions.
We can quickly add these for emerging interests, and economically present them. And we know how to do these services affordably.
Our Annual Convention and Exhibition (ACE) provides substantial income from exhibits, sponsors and delegates, providing the annual setting for hundreds of technical presentations, forums and for needed meetings of committees and boards of our Association.
For over a decade we have sponsored the International Conference and Exhibition (ICE) events outside the United States, attracting over 1,000 technical abstracts in recent years, as well as providing field trips and short courses for members who may not be able to travel to the ACE.
This year we will begin to sponsor two of these meetings per year, jointly with our sister society, the Society of Exploration Geophysicists (SEG). Together, AAPG and SEG will provide more pure and applied science to members, in more places around the world.
This change comes at a challenging time, and the EC and AAPG staff members are closely monitoring the economics of these new joint events very closely.
Thankfully, we have an Investment Fund, overseen by a committee of members and advised by professionals, which is our reserve fund for challenging times.
When years are good, as was the case in 2014, we place our operating surplus into this fund.
We may need to draw on a small amount of it this coming year – but a healthy fund will remain for future years.
The Executive Committee already has deferred a number of planned programs in our recent budget and continues to monitor the operating income.
Overall expenses are down from fiscal 2015 – and, unfortunately, revenues are projected proportionally lower than our expenses. We have not made all the reductions yet that we may throughout this coming year.
The fact that our financial year is July-June, and our major financial contributor ACE is at the end of each fiscal year, means that final results are always uncertain until the finances close at the end of each June.
Certainly 2016 will be no different, since the ACE in Calgary will be in late June.
But please be assured that we are all looking closely at expenses and income during the coming months.
We look forward to providing all the superior science and member programs through the coming year, as we always do, with only necessary program reductions or withdrawal from investments.
The Association is financially healthy, and we will continue to watch economics closely as we journey through this challenging year.