Just a year after gloomily announcing that it had fallen deeply into debt, the American Institute of Architects this month announced at its annual meeting in Charlotte that, remarkedly, it had already managed to right its fiscal ship in stunningly short order.
According to its 2001 audit, completed this spring by accountants PriceWaterhouseCoopers LLP, the 70,000-member AIA last year took in about $39.2 million in total revenues, set against expenses of $36.1 million. Thus, net assets last year improved to $3.1 million and now stand firmly in the black at a positive of $1.66 million. That represents a stark contrast to recent predictions. Last spring, after 2000 net assets had fallen into the red by $1.5 million, AIA had projected that it would free-fall to nearly $6 million in annual debt.
Now, however, AIA projects its assets will climb to $4.5 million in 2003. That figure has not been above $4 million since 1998. As recently as 1996, in fact, the association's net annual assets were at a lofty $9 million.
Key to the most recent turnaround was the closing last year of 'AECdirect,' the association's failed internet venture, which had amassed debts to some 60 creditors. Under a January agreement with the Delaware Secretary of State, Architects-Engineers-Contractors Inc. (AEC) was officially dissolved, with creditors agreeing to receive only a fraction back from their original investment.
The following is an excerpted statement released to members in Charlotte from AIA Executive VP and CEO Norman L. Koonce, FAIA:
Our new financial year is off to a healthy start with encouraging news. Our solid performance last year has been confirmed by the 2001 financial audit. We have received confirmation of the dissolution of AEC, and, finally, our continuing commitment to operating in a disciplined and businesslike manner is demonstrated by the fact that we are ahead of budgeted targets for the first quarter of 2002.
We have received an unqualified audit opinion for 2001 from our auditing firm, PriceWaterhouseCoopers. Net income and total net assets for 2001 exceeded our plan. The completed audit confirms that total net assets improved by $3.1 million and now stand at a positive $1.66 million. This resulted from three factors:
1. AEC's total lifetime cost to the AIA was far less than expected;
2. Income from the extension of the magazine contract with McGraw-Hill;
3. The 2001 operating budget provided a positive contribution to the assets of $1.4 million, exceeding the budgeted goal.
This is the second year in a row during which the American Institute of Architects' operating revenues have exceeded expenses.
