PRESIDENT’S REPORT

January 21, 2015

Central Florida Chapter

NDIA Proprietary/Confidential: For Internal Use Only by Staff,Directors, Affiliate Presidents, Chapter Presidents, Division Chairs.

Not for release to third parties.

OVERVIEW• FY 14--Positive Operating Correction to FY 13• Overhang--Previous FYs-$380K Penalties • FY 14 a Busy Year….

– Outsourced Accounting – Improved Accounting Software– Web Site Upgrade– USW-Spring back in the portfolio

• Corporate Membership Decline has leveled • FY 15 Promises Solid Year--Some New Twists

– US Army Medical Conference & Exhibition– Larger AFEI ‘Plug Fest’– Jt Chem-Bio Conference & Exhibition is back

0

10000

20000

30000

40000

50000

60000

70000

80000

GovernmentAttendees

IndustryAttendees

Exhibitors &VEOs

Total

NDIAAggregate Participation

2.2%

34644620

‘12 ‘13

12.5%

‘14

3031Exhibits: Booth Equivalents

74,908

61,68963,028

FY 97

FY 98

FY 99

FY 00

FY 01

FY 02

FY 03

FY 04

FY 05

FY 06

FY 07

FY 08

FY 09

FY 10

FY 11

FY 12

FY 13

FY 14

In-vestment Re-serves

9.53 9.53 11.15 13.97 12.25 11.63 14.52 17.19 20.13 22.6 26.8 24.27 25.2 27.67 27.14 30.76 32.96 36.02

Available Bank Bal-ance

0.94 0.86 0.93 1.57 1.59 2.78 3.51 4.85 4.4 4.5 5.68 7.54 8.22 13.92 17.3 17.45 13.38 11.91

5

15

25

35

45

55 Available Bank Balance Investment Reserves

$ M

illio

ns

OPERATING AND INVESTMENT RESERVES

4

5

FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY 15

0

10

20

30

40

50

60

70

80

Staff SizeVol Turnover

STAFF SIZE AND TURNOVER

- - 54

6

FY 96

FY 97

FY 98

FY 99

FY 00

FY 01

FY 02

FY 03

FY 04

FY 05

FY 06

FY 07

FY 08

FY 09

FY 010

FY 011

FY 012

FY 013

FY 014

FY 015

Baseline

8421508

8105172

13214648

13196000

14433238

15128852

16328873

17986548

18737444

20316648

21922689

23273045

27486210

27903833

28637835

30955892

32522028

25638732

21697569

20162279

Actual

8577248

8999293

12610416

12359744

14269904

15489794

17988601

19612228

22407351

23469903

25409749

25354096

28768547

28480383

31714345

33986344

30762087

19560385

20834201

NaN

% Increase

0.0184931249842665

0.11031487055425

8

-0.04572441127451

9

-0.0633719308881479

-0.0113165181645311

0.0238578578202761

0.10164375704312

2

0.0903831018603458

0.19585953132134

8

0.15520547484014

1

0.15906169174776

0.0894189393781518

0.0466538311393241

0.0206620359288991

0.10742816277836

6

0.0978958060714258

-0.0541153522160426

-0.23707673998854

5

-0.0397910014711786

NaN

-2500000

2500000

7500000

12500000

17500000

22500000

27500000

32500000

37500000

Operating Revenue - Baseline to Actual

Baseline

Actual

% Increase

(Preliminary FY 14 Results)

As of 11-13-14

7

FY 96

FY 97

FY 98

FY 99

FY 00

FY 01

FY 02

FY 03

FY 04

FY 05

FY 06

FY 07

FY 08

FY 09

FY 10

FY 11

FY 12

FY 13

FY 14

FY 15

FY 96

FY 97

FY 98

FY 99

FY 00

FY 01

FY 02

FY 03

FY 04

FY 05

FY 06

FY 07

FY 08

FY 09

FY 10

FY 11

FY 12

FY 13

FY 14

FY 15

Operating Revenue

8.577

8.999

12.61

12.36

14.27

15.49

17.984

19.612

22.518

23.368

25.41

25.42

28.77

28.48

31.714

34.001

30.79

19.56

20.83

20.16

Series2

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

NaN

Net to NDIA

-0.70

5

-0.79

9

-0.51

6

-0.41

-0.18

2

0.122

0.88 0.936

0.987

1.021

1.126

0.96 0.32 0.77 2.329

3.117

1.496

-0.91

0.0136

NaN

2.5

7.5

12.5

17.5

22.5

27.5

32.5

37.5

-1.25

-0.75

-0.25

0.25

0.75

1.25

1.75

2.25

2.75

3.25

Operating Revenue and Net to NDIA $M

(Preliminary FY 14 Results)(Without Incentive)

Operating Revenue

Net to NDIA

Op

era

tin

g R

ev

en

ue

Net to NDIA

As of 11-13-14

FY 15 Program OverviewComparison to Prior Years

(000’s)

FY 13 FY14 FY15

Actual (Preliminary) Program

Revenue 19.561 21.005 20.162

Expense 20.448 20.661 19.177

Net ( .914)* .344** .985**

* Includes Incentive Distribution of $ 1.03 M

** Does not include planned incentive distribution

12-02-2014

Dues, 13.2%

Advertising, 6.4%

Mtgs/Exb/Spshp 77.8%

$ 15,683,271

Other , 2.6%

FY15 Revenue Sources by Activity

$2,657,485 $ 529,523

Total Revenue $ 20,162,279

$ 1,292,000

FY 14:

(000’s) FY 13 FY14* FY 15 $ % $ % $ %

Other .677 3.5 .579 2.7 .530 2.6Dues 3.090 15.8 2.919 13.9 2.657 13.2Advert 1.295 6.6 1.256 5.9 1.292 6.4Mtg/Exb 14.499 74.1 16.291 77.5 15.683 77.8TOT 19.561 21.005 20.162 (* Preliminary)

12-02-2014

NDIA, 63.5%

NTSA, 32.1%

AFEI, 2.4% PSA, 1.0% WID, 1.0%

FY 15 Revenue Sources by Organization

FY 13 FY 14 * FY 15 % % %

AFEI 1.0 1.1 2.4PSA 0.4 1.0 1.0WID 1.0 0.9 1.0NDIA 59.8 64.5 63.5NTSA 37.8 32.5 32.1

* Preliminary

12-02-2014

Personnel 32.8%

$ 6,294,248

Rent/Depr 5.0%

$ 950,629

Mission (Events, Mbrshp) 40.1%

$ 7,687,598

Support (Gov Pol/ Adv/Edit/BusOps)

22.1% $ 4,244,353

FY 15 Expense Distribution

Total Expense $ 19,176,828

Salaries & Fringe for all Business Centers

Facility Rental, Catering,Security, CreditCard Fees, Advert, Awards. Etc.

(000s) FY 13 FY 14* FY 15 $ % $ % $ %

Personnel 7.872 38.5 6.662 32.2 6.294 32.8Rent/Depr .818 4.0 .883 4.3 .951 5.0Mission 8.302 40.6 7.822 37.9 7.688 40.1Support 3.476 17.0 5.294 25.6 4.244 22.1 TOT 20.448 20.661 19.177(* Preliminary)

12-02-2014

FY 15 Program Operating Net(Total Revenue less Total Expense)

•NDIA Membership 383,496 Operations 2,565,059 Editorial (570,779) Advertising 557,089 Gov Policy (484,560) Bus Ops (4,696,852)•NTSA 3,122,178•AFEI 65,220•WID ( 48,315)•PSA 92,969

FY 15 Program Net Income 985,451

*Preliminary12-02-14

MEMBERSHIP

13

Corporate Members – NDIA and Affiliates1,603

Individual Members – NDIA and Affiliates89,531

Govt Members – NDIA and Affiliates25,009

As of 11-13-14

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Members 1,119 1,234 1,365 1,382 1,478 1,564 1,749 1,758 1,723 1,604 1,606

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Members 34,200 38,396 43,162 48,861 61,734 73,598 86,441 93,267 95,623 91,998 89,619

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0

5,000

10,000

15,000

20,000

25,000

30,000

Members 8,673 11,587 12,579 11,869 16,722 21,049 25,082 26,233 27,723 27,200 25,055

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

MEMBERSHIP

• Corporate Membership Trending Up• CSC rejoined as Corp Member• 222 three-year memberships

• Recruitment• SOFIC – New 5-tiered criteria for exhibiting• DSIE-Corporate Membership Required

14

Continued Progress on Policy

• New Policy Team• Assistant Vice President for Policy, Will Goodman• Director--Legislative Policy, Jimmy Thomas• Director--Executive Branch Policy, Chris Fletcher

• Partial relief on sequestration• Last year’s Effort Successful/FY 14-15• Omnibus Approp. for FY 15• Further work for relief in FY16.

• Increased Presence-Congress/ Executive • Chairman and Senior Fellows testified four times • Numerous meetings with DAE, SAEs• President Testified-Senate Approp.Defense

16

NATIONAL DEFENSE ADVERTISING Average Monthly Readers

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (Jan -Nov)

Nov 2014

BPA Qualified Read-ers

22427 25873 30766 33819 36051 41325 53087 62065 69541 77246 83221 83005 80812 81190

Total Readership w/pass-along

56068 64683 76915 84548 90128 103313 132718 155163 173853 295852 318736 317909 309510 310958

25,000

75,000

125,000

175,000

225,000

275,000

325,000

Pass-Along Readership Per Copy: 2002 - 2010 = 1.50 2011 - 2014 = 2.83Opportunities

• Grow Military/Government/Congressional readers

17

NATIONAL DEFENSE Summary of Advertising Performance

FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Total Revenue 775912 1054514 1209851 1214004 1308012 1476253 1547622 1726703 1526569 1713798 1670045 1634189 1627202 1607327

100,000

300,000

500,000

700,000

900,000

1,100,000

1,300,000

1,500,000

1,700,000

• Adding additional digital advertising options on websites and within eNewsletter products to provide added opportunities to generate revenue and new ways for advertisers to reach our members/audience.

Added Value Information & Service

• ‘Weekly Insider’ eNewsletter

• ‘Defense Watch’ eNewsletter

• ‘Weekly Digest’ eNewsletter

• NTSA ‘Training Industry News’ eNewsletter

• DSIE ‘AreYouReady?’ eNewsletter

NDIA Weekly Insider

• Email Newsletter

• Partnership with CQ

• Distribution—64,000

• Advertising partner PenFed Credit Union

NDIA DEFENSE WATCH

• Email Newsletter• Magazine & Blog • Distribution—70,000• NDIA Event Promo.• Advertising Partners:

• AIRBUS GROUP• IHS• BAE• FLIR

NDIA Weekly Policy eDigest

• Corporate Members

•  Acquisition, Defense

• First Issue, May 2014

• Distribution--2000

• Ad sales—Jan 2015

NTSA TrainingIndustrynews

• October 2014 Launch

• Distribution—25,000

• NTSA, I/ITSEC, MODSIM

• Advertising partners include:

• Lockheed Martin• CAE

DSIE “Are You Ready?” Newsletter

• Monthly Newletter

• Cyber Threat Info

• Issue Oct. 2014

• Distribution:– Industrial Security Cmte.– Cyber Divisions– Intel Cmte.

• NDIA Received Google Ad Grant

– Non-Profit edition--Google AdWords

– Advertise Events at No Cost

– $330/Day--$10,000/Month

• Air Force Acquisition—Partnered w/NDIA-AIA

• Identify best practices to ‘reduce award time’

• ~30 best practices identified

• NDIA Participants: NGC, RockwellCollins, P&W

• Next effort: Cost Capability Analyses

International Division Outreach

• Bi-monthly division meetings with speakers – – Ms. Ann Cataldo, DASA for Defense Exports and Cooperation ASA(ALT)– MG Frank D. Turner III, USA, CG, USASAC– Mr. Eric Hirschhorn, Under Secretary of Commerce for Industry and Security– Mr. Keith Webster, Director, International Cooperation, OUSDAT&L

• Attaché Luncheons– Netherlands – October – 53 attendees– Japan – February – 116 attendees– Australia – June – 168 attendees– Sweden – September – 48 attendees

•  Industry Days– DICC in Korea – November - 28 U.S. attendees– U.S.- Finland Defense and Security Industry Seminar – October – 111 attendees– U.S.- Austria Defense Industry Day – January – 127 attendees– U.S.- Denmark Defense Industry Seminar – May – 74 attendees– Canada-Australia-UK-U.S. Quadrilateral Conference – May – 129 attendees

•  3 Webinars…2 on ITAR and 1 on Export Control Reform Update  • Hosted multiple meetings and signed MOU with SJAC

Management Activities

• Accounting Outsourced to CliftonLarsonAllen

• Accounting processes being refined/re-engineered• Staff SOPs being updated

• Retained new Auditors – Tate & Tryon

• 3 solid proposals to outsource web site evaluated

• Exploring Consortium management opportunity; OTA funded

• Partnership event with Defense Mobility Enterprise

Summary

• FY 14 was positive rebound from FY 13

• FY 15 promises to be….– Busy with events and initiatives– More successful than FY 14