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2015 NBAA ANNUAL REPORT

2015 NBAA ANNUAL REPORT

YEAR IN REVIEW 4Importance of No Plane No Gain Resonates in 2015 4Legislative and Regulatory Advocacy 6Safety and Aircraft Operations 8Networking and Commerce 10Career Development and Business Resources 12

2015 AWARDS 14

INDEPENDENT AUDITOR’S REPORT 16Combined Statements of Financial Position 17Combined Statements of Activities 18Combined Statements of Cash Flows 19Notes to Combined Financial Statements 20

NBAA BOARD OF DIRECTORS 26

NBAA ASSOCIATE MEMBER ADVISORY COUNCIL 27

NBAA STAFF 28

4 2015 NBAA ANNUAL REPORT

In 2015, NBAA and the General Aviation Manufacturers Association (GAMA) marked six years since joining forces to launch No Plane No Gain, a campaign dedicated to high-lighting the many virtues of business aviation and telling the actual stories of a vital American industry that had been stricken by a devastating economic downturn, along with repeated negative characterizations from some Washington policymakers and news outlets.

“At a time when business aviation was repeatedly and unfairly targeted as a symbol of excess, No Plane No Gain was stood up to counter those misperceptions, in part with examples of our industry’s important social, economic, and humanitarian contributions that signified the very best of our country,” said NBAA President and CEO Ed Bolen. “Today, the message of No Plane No Gain continues to resonate among lawmakers and other influential officials and leaders.”

NEW STUDY SHOWS ECONOMIC IMPACTIn January, NBAA was among eight aviation associations that unveiled a new industry-wide study in detailing the eco-nomic contributions of general aviation to the U.S. economy. Conducted by PricewaterhouseCoopers, the study deter-mined that general aviation supports 1.1 million total jobs and supplies $219 billion in total economic output in the United States. These numbers include direct, indirect, induced and enabled impacts.

The study determined the industry’s economic impact based on data from 2013, the most recent year available. It was accompanied by a narrative report, titled the “The Wide Wings and Rotors of General Aviation,” capturing some of the stories behind the industry’s significant economic and community impact throughout the United States.

In November, the campaign also released the 2015 edition of the Real World of Business Aviation study, conducted by Harris Poll, which confirms that business aviation con-tinues to provide the same benefits that have traditionally been associated with its use, including – but not limited to

– greater efficiency and flexibility in travel scheduling; height-ened employee productivity while en route; access from secondary cities to larger metropolitan areas for exploring business opportunities; and a means of business transport to augment airline travel.

BUSINESS LEADERS ON BUSINESS AVIATIONThe messages of No Plane No Gain are most effective when they come from those who continue to utilize busi-

ness aviation to make their companies more efficient, productive and competitive. Since its initial launch in 2013, the campaign’s Business Leaders on Business Aviation initiative has gathered the voices of more than 25 CEOs from some of the country’s most dynamic and widely known com-panies, affirming how business aviation works for them.

Attendees at the 2015 NBAA Business Aviation Convention & Exhibition in Las Vegas learned that several more voices had joined the initiative, bringing total participation to more than three dozen prominent CEOs. In addition to being published in an expanded booklet, signage featuring these additional testimonials highlighting the well-received and popular campaign were displayed prominently throughout the event.

CAMPAIGN THEMES ECHOED ACROSS COUNTRYThroughout the year at events across the United States, lawmakers and other key officials recognized and acknowl-edged themes of the No Plane No Gain campaign regarding the importance of aviation to local economies, and the need

YEAR IN REVIEW

Importance of No Plane No Gain Resonates in 2015

2015 NBAA ANNUAL REPORT 5

to attract and retain more aviation-related businesses to their communities and districts.

As one example, a symposium in Las Vegas, NV, brought together aviation stakeholders doing business throughout the Silver State. Sponsored by U.S. Rep. Dina Titus (D-1-NV), the daylong event brought together state Chamber of Commerce leaders and airport managers, and representa-tives from the state’s broad range of aviation manufacturers and service providers to highlight the industry’s significant contributions to the state economy.

NBAA’s six regional representatives also worked throughout 2015 to spread the messages of No Plane No Gain not only in Washington, but also to policymakers and opinion leaders outside the nation’s capital. They distributed scores of copies of the Business Leaders on Business Aviation booklet to state legislators and staff members during meetings with government officials.

“Many of them are freshmen legislators who weren’t aware of what business aviation was,” stated NBAA Director of Regional Programs Steve Hadley. “As I went through the booklet with them, their eyes were opened as they recognized businesses within their districts and saw how business aviation is essential to the success of their con-stituents’ companies.”

BETTER COMMUNICATION, EXPANDED REACHSince its unveiling in 2009, the No Plane No Gain program has taken full advantage of new communication technolo-gies while building on proven advocacy techniques. In 2015, the campaign refreshed its branding across all platforms, updated and improved its website and newsletter for better tablet and smartphone compatibility, and expanded its reach on social media.

Along with its personal device-friendly setup, the new website now has several important added features designed to increase campaign engagement, including a new “Take Action” resource that enables website visitors to send mes-sages to their elected officials in Congress, to educate them about the importance of business aviation, and new social media features, including infographics that can be shared via Facebook, Twitter and Pinterest.

In addition, the website has retained a number of well-liked resources for those who want to advocate on behalf of business aviation, including not only the above-mentioned studies and surveys, but also media coverage focused on the positive aspects of business aviation, interview tips and sample letters to the editor, and downloadable No Plane No Gain logos and campaign ads.

www.noplanenogain.org

At left, from left to right: NBAA Chairman Ronald Duncan, NBAA President and CEO Ed Bolen, GAMA President and CEO Pete Bunce and GAMA Chairman Joe Brown hosted the No Plane No Gain Media Kickoff Breakfast on the opening day of NBAA's Business Aviation Convention & Exhibition on Nov. 17 in Las Vegas, where campaign signage had a strong presence (pictured at right).


Throughout 2015, NBAA remained at the forefront of debate over policies affecting the unfettered convenience and flex-ibility provided by business aviation in the United States.

Leading this agenda in 2015 were issues at the national level, including proposals introduced for creating a privatized ATC system funded through user fees, as part of congres-sional reauthorization of the FAA, as well as local concerns, including threats over access to general aviation airports.

RALLYING AGAINST PRIVATIZED ATC Arguably the single greatest concern for business aviation in 2015 came near the year’s halfway point, as word surfaced of proposals for a privatized ATC system, funded through user fees, as part of an upcoming FAA reauthorization bill.

Similar to past instances when legislative proposals repre-sented potential threats to the industry, NBAA immediately mobilized the strength of the business aviation community, reaching out to the people with the association’s more than 10,000 member companies to mobilize in response to the ATC privatization proposals.

“We have already seen how similarly privatized systems have negatively impacted general aviation in several foreign coun-tries, as these entities tend to favor their own collective inter-ests,” NBAA President and CEO Ed Bolen noted in a call to action issued to NBAA members and industry stakeholders.

“Without Congress to ensure that our nation’s air traffic system safeguards the aviation needs of the entire public – including the people and companies that rely on general aviation in small towns – such sweeping authority would instead be granted to a group of self-interested parties left to make decisions about where and when companies using business aviation can fly, how much it will cost to do so

and what type of payment – including user fees – will be demanded of operators.”

Thousands of NBAA members and industry stakehold-ers responded to Bolen’s call, utilizing the association’s online Contact Congress resource to send email messages directly to their elected representatives. Many also used the #NoPrivatizedATC hashtag on social media sites like Twitter to help spread word to lawmakers about the potentially destructive effects of these proposals.

Throughout the year, Bolen stated his concerns about ATC

privatization funded through user fees in numerous appear-ances at industry events, Washington policy forums and appearances before Congress. “The airspace above our heads belongs to the American public,” he noted at a hear-ing by the U.S. Senate Commerce, Science & Transportation Committee. “It doesn’t belong to any private company, or group of companies. It doesn’t belong to any segment of the aviation industry, or even the aviation industry itself.

“It is the public’s elected representatives who should continue to ensure that our airspace is managed in the best interest of all Americans, rather than to the exclusive benefit of some industry groups,” he emphasized.

Legislative and Regulatory Advocacy

Bottom left and right: NBAA's message to take action against privatized ATC was on display at the Business Aviation Convention & Exhibition in Las Vegas, where attendees used NBAA's Contact Congress resource to send messages to their elected officials. Top: NBAA President and CEO Ed Bolen testified against privatized ATC at a Senate Commerce, Science & Transportation Committee hearing in May.


As the year drew to a close, Bolen sounded another call to action following a media teleconference held in Washington by the CEOs of several airlines, who declared that the forma-tion of a privatized ATC system would be the airlines’ top priority in the coming year’s FAA reauthorization debate.

“The airlines are readying for the coming battle over ATC privatization, and we must do likewise,” Bolen said in his message. “The business aviation community must once again also band together in active opposition to such a pro-posal.” This second call to mobilization generated an even stronger response from industry than the one from Bolen earlier in the year, indicating the continuing opposition from the business aviation community to such a proposal.

PRESERVING AIRPORT ACCESSAlso in 2015, NBAA reemphasized the association’s com-mitment to maintaining unencumbered access by business aviation operators to general aviation airports across the country, most notably through efforts to preserve access to California’s historic Santa Monica Airport (SMO) and, on the other side of the country, at New York’s East Hampton Airport (HTO).

Responding to a move by Santa Monica’s city attorney to restrict the sale of certain aviation fuels, and limit lease renewals at SMO for aviation-related businesses, NBAA Chief Operating Officer Steve Brown urged city officials to exercise “extreme caution” if it proceeds with environmental remediation requirements for tenants, or takes over fuel sales at the airport.

Brown also noted “that the city should not take any pre-cipitous action while legal questions about the airport are working their way through FAA administrative and court proceedings,” a position also shared by the city’s attorney.

Continuing its effort against operating restrictions at HTO, NBAA submitted a reply to the FAA regarding East Hampton’s formal answer to the Part 16 complaint filed by the association in May. NBAA had asked that the FAA require the revocation of two operating restrictions – an expanded curfew on so-called “noisy” aircraft, and a one-trip-per-week limit for those aircraft.

NBAA also is a party to a federal lawsuit brought against East Hampton, which challenges all of the restrictions. In June, the court stayed the trip limit, but let the expanded curfew and a general curfew for all aircraft take effect. As 2015 drew to a close, the decision was under appeal.

SUPPORTING SENSIBLE EMISSIONS POLICIESNBAA was quick to respond after the U.S. Environmental Protection Agency (EPA) announced in June a notice of proposed rulemaking (ANPRM) to consider new regulations

for carbon emissions from aircraft, asserting the EPA’s authority to regulate carbon-dioxide emissions from aircraft under the auspices of Section 231(a) of the Clean Air Act.

In its initial response to the ANPRM, NBAA noted that avia-tion emissions account for a mere two percent of all trans-portation emissions globally, and emissions from general aviation aircraft account for only a tiny portion of all aviation emissions. The response also reaffirmed the industry’s long held position that any aviation policymaking must be sensible and workable, and that the appropriate international govern-ing body should handle any policy carrying international ramifications.

The EPA acknowledged this position, and the ANPRM includes language signaling the EPA’s intent to align its stan-dards with those under consideration by the International Civil Aviation Organization (ICAO).

NBAA is part of a global aviation coalition committed to carbon-neutral growth and an additional 1.5 percent in annual fuel efficiency improvements by 2020. NBAA has also been directly involved in the ICAO process to determine an acceptable standard for business aircraft emissions, includ-ing through its role as observers to ICAO via the International Business Aviation Council.

SECURING PILOT PROTECTIONSLegislation introduced in February 2015, dubbed the Pilots Bill of Rights 2 (PBOR2), included language proposed by NBAA to ensure that pilots and other certificate holders fac-ing FAA enforcement action have timely access to informa-tion necessary to assist them in formulating a defense.

The resulting provisions, specified in both the Senate (S.571) and House (H.R.1062) versions of PBOR2, would require the FAA to hand over its enforcement report when serving emergency orders and upon request in all other cases.

NBAA has also consistently joined with other industry groups in calling for the FAA to take action on long-delayed industry calls for reform to the third-class medical requirement for general aviation pilots, which is a key aspect of PBOR2.


NBAA and its standing committees continually provide safety, operational guidance and resources for members on a broad range of topics, from airspace and airports access, to domes-tic and international flying, to maintenance and scheduling. In 2015, NBAA gave special attention to emerging issues like the integration of drones into business aviation, as well as industry safety priorities like loss of control.

ENGAGING IN UAS POLICY DEVELOPMENTNBAA has, for more than a decade, been directly involved in all major government/industry working groups tasked with the safe integration of unmanned aircraft systems (UAS), or drones, into the National Airspace System.

The association has long held the position that it is impera-tive that any introduction plan for UAS be thoughtful, delib-erative and focused on safety. This means UAS should not share the same airspace with manned aircraft until they have equivalent certification and airworthiness standards as manned aircraft, including the ability to take timely directions from air traffic control, and to sense and avoid other aircraft and UAS.

Following years of anticipation by a growing segment of the business aviation community, in early 2015 the FAA issued a notice of proposed rulemaking (NPRM) to govern commer-cial operations of small, unmanned aircraft systems (s-UAS). In its comments on the proposed rulemaking, NBAA called the plan a “sensible, measured approach” towards regulat-ing this emerging segment of business aviation.

However, NBAA also outlined concerns with some proposed regulations that could potentially affect aviation safety, including language in the NPRM specifying that s-UAS

operators utilize air traffic control (ATC) frequencies when alerting facilities controlling that airspace to their operations.

Noting that pilots of manned aircraft are “exposed to similar if not greater safety risks from s-UAS operations” in uncon-trolled airspace, NBAA also recommended that commercial s-UAS operators operating within three miles of airports in Class G airspace should be held to the same prior approval requirement as operations near Class B, Class C and Class D airports, and within the lateral boundaries of surface areas underlying Class E airspace.

In October, NBAA accepted an invitation to be among the participating organizations on the newly formed UAS Registration Task Force Aviation Rulemaking Committee, to determine regulations governing the registration of private and recreationally operated UAS.

In November, the task force recommended that the FAA cre-ate a registry requiring s-UAS owners to provide their name and address to a web-based database before operating their aircraft. NBAA agreed with those recommendations, but also noted that additional information – such as the operator’s email address, phone number and serial number of the UAS – could also prove important.

FOCUSING ON LOSS OF CONTROL With loss of control in flight (LOCI) accidents resulting in more fatalities in business and commercial operations than any other category of accident over the last decade, reducing LOCI is a priority of the International Civil Aviation Organization and aviation professional organizations across the globe. NBAA was among 16 general aviation organiza-tions and stakeholders to join with the FAA in June to launch the “Fly Safe” national safety campaign to educate pilots

Safety and Aircraft Operations

At left: Unmanned aircraft systems offer great promise for a variety of applications, including opportunities for use by entrepreneurs and companies that rely on aviation as part of doing business. At right: NBAA released a safety video to help single-pilot operators mitigate loss of control in flight accidents.


about factors contributing to loss of control accidents and methods operators may use to avoid them.

The Fly Safe campaign ran through December 2015, with a new safety topic highlighted each month on the FAA web-site. These focus areas were determined from the work of the GA Joint Steering Committee, on which NBAA serves, following detailed analysis of fatal accidents and the develop-ment of safety recommendations.

In 2016, NBAA also participated in an NTSB forum about preventing general aviation LOCI, in which more than 20 panelists from various aviation sectors – including flight training and education, regulatory, human performance and aeromedical – discussed factors contributing to the risk of loss of control. They identified potential solutions, such as greater use of angle of attack indicators, enhanced scenario-based training and redoubling pilot commitment to maintain situational awareness at all times.

Further, reducing loss of control accidents was among the 2015 Top Safety Focus Areas identified by the NBAA Safety Committee. The committee produced an educational video about a single owner-pilot who finds himself in a loss of control situation.

The committee’s other areas of safety focus for the year were runway excursions, fatigue, procedural non-compli-

ance, distraction and technology management, airspace complexities, single-pilot task saturation, birds and wildlife strikes, and ground handling collisions.

LAUNCHING NEW NATIONAL SAFETY FORUMAt the close of the year, NBAA introduced its inaugural National Safety Forum during the association’s 2015 Business Aviation Convention & Exhibition in Las Vegas, NV.

The daylong forum brought together top government and industry leaders to discuss the principal safety issues confronting business aircraft operators. The program was tailored specifically to the interests of aviation department managers, chief pilots, directors of maintenance, safety man-agers, schedulers and dispatchers, cabin crew and anyone interested in improving business aviation safety.

Speakers for the inaugural forum included NTSB Chairman Christopher Hart and the FAA’s Director of Accident Investigation and Prevention Wendell Griffin. Among the topics discussed at the forum were runway excursions, fitness for duty, data sharing, the role of procedural compli-ance in maintaining professionalism, and airport and ground handling safety.

In November 2015, NBAA hosted the first-ever National Safety Forum during its Business Aviation Convention & Exhibition in Las Vegas, which brought together top government and industry leaders to discuss the principal safety issues confronting business aircraft operators.


Multiple world-class NBAA events – held in Europe, Asia and multiple U.S. cities – provided the best opportunities for our industry to network and do business.

SHOWCASING THE DIVERSITY OF BUSINESS AVIATION IN THE U.S.Perhaps the single-best opportunity to highlight the value of business aviation, and to demonstrate the industry’s impor-tance to government officials and media representatives, came at NBAA’s Business Aviation Convention & Exhibition (NBAA-BACE), which took place from Nov. 17 to 19, 2015, in Las Vegas, NV.

NBAA-BACE brought together more than 27,000 attendees – including entrepreneurs and companies using business aircraft, manufacturers and influential industry leaders – into one meeting place. The three-day event featured esteemed international government and aviation officials, who shared their perspectives on issues relevant to the industry’s ongoing development both in the United States and across the globe.

More than 1,000 exhibitors displayed their products and services, and approximately 100 business aircraft were parked side-by-side, between two static display areas – one on the convention exhibit floor, and the other at nearby Henderson Airport – for attendees to review and compare. Attendees from the show represented all 50 U.S. states, and 96 countries.

“This year’s show was enormously successful,” said NBAA President and CEO Ed Bolen. “In addition to the strong participation from exhibitors and attendees alike, our industry’s largest event once again showcased the size and significance of the business aviation community, as well as the passion and professionalism of its people.”

On the convention’s opening day, featured speakers included Nevada Rep. Dina Titus, Oklahoma Gov. Mary Fallin, FAA Administrator Michael Huerta and acclaimed country singer/

songwriter Dierks Bentley. The show’s second-day speakers included Nevada Lt. Gov. Mark Hutchison and “Miracle on the Hudson” Capt. Chesley B. “Sully” Sullenberger.

NBAA-BACE also featured dozens of education sessions highlighting the benefits of business aviation, and addressing contemporary concerns and considerations for people using – or wanting to use – a business aircraft.

SUPPORTING INDUSTRY GROWTH IN ASIAFrom April 14 to 16 in Shanghai, China, ABACE once again put China at center stage of the Asian and global business aviation community, as the host country for the strongest edition yet of the Asian Business Aviation Conference & Exhibition (ABACE2015). “As we celebrated the show’s 10th year, it was clear that a high-water mark had been reached, not only for ABACE, but for business aviation in China and across Asia,” Bolen noted.

ABACE is jointly hosted each year by NBAA and the Shanghai Airport Authority (SAA), in coordination with the Asian Business Aviation Association. In 2015, the show featured 38 aircraft across the full spectrum of business avia-tion – from pistons through intercontinental jets, as well as helicopters – on static display. It also hosted 183 exhibitors, covering the largest footprint in the history of ABACE, and representing a five-fold increase over the 30 exhibitors at the first edition of ABACE.

Significantly, more than 40 percent of this year’s exhibiting companies were based in Asia – the highest percentage of Asian companies exhibiting at ABACE to date – meaning that ABACE had evolved into a truly international show with strong Asian characteristics.

Top national and international officials served as keynote speakers for the ABACE2015 Opening General Session, where attendees heard from Wang Zhiqing, deputy director of the Civil Aviation Administration of China, Susan Kurland,

Networking and Commerce

The 2015 NBAA Business Aviation Convention & Exhibition in Las Vegas demonstrated the vitality of the show and the industry, with strong participation from exhibitors and attendees alike.


assistant secretary for aviation and international affairs at the Department of Transportation, and Li Durun, SAA chairman.

HIGHLIGHTING INDUSTRY’S VALUE IN EUROPEHeld from May 19 to 21 at Geneva’s Palexpo Convention Center, the European Business Aviation Convention & Exhibition (EBACE2015) once again underscored the show’s value to exhibitors and attendees, and its continuing impor-tance to the industry’s advancement in Europe and beyond.

Hosted by NBAA and the European Business Aviation Association, the 15th annual EBACE offered an opportunity to consider the show’s phenomenal growth since the first edi-tion of the show in 2001. For example, that inaugural EBACE featured 200 exhibitors and about 30 aircraft on static display. This year, the event drew nearly 500 exhibitors and nearly 60 aircraft on display. EBACE2015 attendees came from more than 100 countries, from the European region and beyond.

Attendees had an opportunity to hear from industry thought-leaders, who participated in a variety of education ses-sions, an International Transactions Seminar and a Safety Workshop. The event also featured the first-ever Inspiration Zone with a dedicated focus on the industry’s future.

At the show’s Opening General Session, Francois Longchamp, state counselor of the Canton of Geneva, reiter-

ated his support for business aviation as essential to regional commerce. Patrick Ky, the executive director of the European Aviation Safety Agency, outlined his plans to ensure that future policymaking by the agency reflects the diversity of companies and mission profiles in business aviation.

PROMOTING INDUSTRY AT REGIONAL LEVELNBAA’s Business Aviation Regional Forums always provide an important opportunity for engagement with local busi-nesses on the grassroots level to exchange information about specific airport policies, environmental protocols, safety and security proposals, taxation and other issues. In 2015, forums were held on Feb. 19 at Palm Beach International Airport in West Palm Beach, FL; June 25 at Teterboro Airport in New Jersey; and Sept. 17 at St. Louis Downtown Airport in Missouri.

These three regional forums brought current and prospective business aircraft owners, operators, manufacturers, custom-ers and other industry personnel together for a one-day event at some of the best airports and FBOs in the nation. The forums also served as a valuable opportunity for those unable to attend the annual Business Aviation Convention and Exhibition in 2015 to engage with local officials about the industry’s needs and importance.

The European Business Aviation Convention & Exhibition (EBACE2015) proved enduring and forward-looking as it marked its 15th year in Geneva.

The Asian Business Aviation Conference & Exhibition (ABACE2015) in Shanghai was the strongest edition of the show in its 10-year history.


In 2015, NBAA continued to provide industry-leading edu-cational and career development opportunities, as well as operational and business management resources covering the topics of greatest concern and impact to the industry.

SUPPORTING INDUSTRY LEADERSHIPLaunched in 2003, NBAA’s Certified Aviation Manager (CAM) program continued to gain momentum in 2015 and today the program is recognized as the gold standard in industry-sponsored aviation-management certification programs. The program reached a significant milestone in October 2015, when it certified its 300th aviation professional.

“Our members have embraced ongoing education as a key to propelling business aviation forward while maintaining the highest standards of safety and professionalism,” said NBAA President and CEO Ed Bolen. “The Certified Aviation Manager program is a central part of NBAA’s efforts to provide opportunities for aviation professionals to excel and strengthen our industry in the process.”

The CAM credential provides a clear standard for preparation and achievement in aviation management. The CAM pro-gram is accredited by the National Commission for Certifying Agencies and is the first program in the aviation industry to receive this recognition. To be eligible for the CAM exam, participants must be pre-qualified and approved through a formal application process.

PROMOTING INDUSTRY SUCCESS, ENGAGING YOUNG PROFESSIONALSThe future success of the business aviation industry depends on the ability of companies to engage those most driven and most passionate as part of a larger ongo-ing succession plan. In 2015, NBAA’s Business Aviation Management Committee continued to promote internship and career programs as the top way to create a clear path-way for students to transition into real-life opportunities in the industry.

In conjunction with the committee in fall 2015, NBAA pub-lished an updated Internship and Career Guide with instruc-tion on how companies, collegiate aviation degree programs, regional business aviation associations and government entities can work together to build a business aviation career program to support the next generation of industry leaders. The association also hosted an internships-focused educa-tion session during the Business Aviation Convention & Exhibition (NBAA-BACE) in Las Vegas for companies inter-ested in learning how to launch an internship program.

The beneficiaries of such internships, young aviation profes-sionals, were invited to take advantage of several NBAA-BACE sessions designed specifically for those who are new to business aviation. For example, the popular Young Professionals (YoPro) Networking Reception provided par-ticipants with an opportunity to meet and greet with fellow rising stars and established industry experts.

Another interactive YoPro event titled “Elevate to New Heights: Young Professionals and the Future of Business Aviation” brought together a panel of business aviation profes-sionals exploring industry transformations, lessons learned and the impact young professionals have on business aviation.

Career Development and Business Resources


HOSTING RECORD-SETTING CONFERENCESEach year NBAA hosts a robust slate of conferences and seminars around the country. Two such events that stood out as record-breakers in 2015 were the Schedulers & Dispatchers Conference (SDC2015) and Maintenance Management Conference (MMC2015).

SDC2015 concluded with a record 2,700-plus people attend-ing, five days of in-depth educational opportunities and a visit from former U.S. Secretary of Transportation Norman Y. Mineta. The conference broke more than attendance records, however, with the conference’s annual Pay It Forward program collecting a record 1,452 suits, dresses, shirts and other business attire for Dress for Success and Sacred Heart San Jose. The conference also raised $4,000 for the two local charities.

There were more than 450 exhibitors at the show, and NBAA unveiled a new category of its Flying Safety Awards: the Scheduler and Licensed Dispatcher Safety Award, which will be presented for the first time in 2016. Also, for the first time, the SDC featured a ground-breaking live emergency response simulation that left many attendees reflecting on the effectiveness of their own emergency response plans.

MMC2015 provided attendees a high-caliber educational program with an emphasis on leadership and management. Held in Portland, OR, the 2015 event attracted more than 800 individuals, which was a new record, and represented 42 states and the District of Columbia, as well as several foreign countries. The event also featured a sold-out exhibit hall with a record 156 exhibitors.

MMC2015 also recognized dozens of maintenance profes-sionals who received NBAA Maintenance Technical Reward

and Career Scholarships (TRACS), which enabled them to attend aircraft model-specific courses at training centers offering aircraft, engine and avionics instruction.

ENHANCING A FLAGSHIP MAGAZINE Building upon an all-time high number of subscribers, NBAA’s official member magazine, Business Aviation Insider, continued to be a must-read publication for those seeking in-depth analysis on important issues, tips for flight depart-ments, owners and operators, and helpful resources for all segments of the industry, as well as news about NBAA member benefits and industry-leading events.

In 2015, NBAA led a thorough redesign for both the print and digital editions of Business Aviation Insider to provide a more engaging reader experience. The digital edition was released through the brand-new NBAA Business Aviation Insider mobile app and optimized for iOS and Android tablet users.

Following the magazine’s re-launch in May and by the end of the year, the new magazine app had more than 100,000 content views, predominantly from Apple iPads.

The redesigned, streamlined digital edition of the magazine also garnered praise from publishing experts, receiving a Folio Ozzie Award for best magazine mobile app/digital

edition and being named a finalist in the Digital Magazine Awards, an international competition.

Career Development and Business Resources


2015 AWARDS

Honoring Leaders and Mentors

JOHN P. “JACK” DOSWELL AWARD Then-NBAA Chairman Ronald Duncan (right) and Bolen (left) presented the Doswell Award to Bob Showalter, retired chairman of Showalter Flying Service, for exemplifying customer service while demonstrating a passionate dedication to business aviation over a 43-year career in the industry.

MERITORIOUS SERVICE TO AVIATION AWARD NBAA President and CEO Ed Bolen (right) presented this award to aerospace innovator Joe Clark, chairman and CEO of Aviation Partners, Inc. and chairman of the Aviation Partners Boeing joint venture, in recognition of his pioneering work on the fuel-saving and performance-enhancing technology of blended winglets.


Flying Safety Awards

NBAA recognized three companies for exemplary safe flying achievement during its 2015 Business Aviation Convention & Exhibition in Las Vegas. Corning Flight Operations and J. Jeffrey Brausch & Company each received 50 Year Safe Flying Achievement Awards, and The Coca Cola Co. received the 60 Year Safe Flying Achievement Award.

NBAA also recognized hundreds more companies and individuals in the following categories:

» 276 companies received Corporate Flying Safety Awards

» 37 companies received Commercial Business Flying Safety Awards

» 435 pilots received ATP or Commercial Pilot Safety Awards

» Two pilots received the Private Pilot Safety Award

» 115 companies received Aviation Maintenance Department Awards

» 300 technicians received Maintenance/Avionics Technician Safety Awards

» 231 support services personnel received Aviation Support Services Safety Awards

During NBAA2015 in Las Vegas, NV, then-NBAA Chairman Ronald Duncan presented Safe Flying Achievement Awards to representatives of Corning, J. Jeffrey Brausch & Company and The Coca Coca Co., respectively.

Honoring Leaders and Mentors

JOHN H. WINANT AWARDFormer NBAA Board member Jeff Lee (center) received this award for his life-long dedication to promoting business aviation interests through his leadership on important safety and professionalism initiatives at both the national and local levels.

SCHEDULERS & DISPATCHERS OUTSTANDING ACHIEVEMENT & LEADERSHIP AWARDHolly Pendleton, senior flight operations coordinator at Aflac, Inc., received this award in recognition of her ongoing mentorship and long-time efforts to further the professional development of schedulers and dispatchers.

16 2015 NBAA ANNUAL REPORT 16 2015 NBAA ANNUAL REPORT

To the Audit CommitteeNational Business Aviation Association, Inc.Washington, DC

We have audited the accompanying combined financial statements of National Business Aviation Association, Inc. and Affiliates (the Association), which comprise the combined statements of financial position as of June 30, 2015 and 2014, and the related combined statements of activities and cash flows for the years then ended, and the related notes to the combined financial statements.

Management’s Responsibility for the Combined Financial StatementsManagement is responsible for the preparation and fair presentation of these combined financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of combined financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these combined financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, the au-ditor considers internal control relevant to the entity’s preparation and fair presentation of the combined financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by manage-ment, as well as evaluating the overall presentation of the combined financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial posi-tion of National Business Aviation Association, Inc. and Affiliates as of June 30, 2015 and 2014, and the changes in their net assets and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

BDO USA, LLP Sept. 21, 2015

INDEPENDENT AUDITOR’S REPORT

2015 NBAA ANNUAL REPORT 172015 NBAA ANNUAL REPORT 17

Combined Statements of Financial PositionJune 30, 2015 and 2014

ASSETS 2015 2014

Current assets

Cash and cash equivalents $ 23,403,281 $ 18,189,420

Accounts receivable - net of allowance for uncollectible accounts of $26,156 in 2015 and $85,825 in 2014 442,399 705,157

Prepaid expenses and other assets 774,893 1,077,257

Total current assets 26,620,573 19,971,834

Noncurrent assets

Deferred compensation investments 1,100,251 1,074,694

Investments in marketable securities 22,853,217 21,296,471

Furniture and equipment - net of accumulated depreciation and amortization of $1,881,403 in 2015 and $1,582,272 in 2014 1,588,515 1,826,849

Total Assets $ 50,162,556 $ 44,169,848

LIABILITIES AND NET ASSETS

Current liabilities

Accounts payable and accrued expenses $ 9,714,877 $ 8,691,643

Deferred revenue

Membership dues 3,576,019 3,371,081

Conventions, seminars, business forums and other 12,831,986 10,968,727

Deferred rent, current portion 168,300 -

Accrued postretirement benefit obligation, current portion 89,000 85,000

Total current liabilities 26,380,182 23,116,451

Noncurrent liabilities

Deferred rent, noncurrent portion 2,188,473 2,067,114

Deferred compensation liability 1,100,251 1,074,694

Accrued postretirement benefit obligation, noncurrent portion 1,780,160 1,705,271

Total Liabilities 31,449,066 27,963,530

Minority interest 3,219,410 2,932,163

Commitments and contingencies

Unrestricted net assets 15,494,080 13,274,155

Total Liabilities and Net Assets $ 50,162,556 $ 44,169,848

See accompanying notes to combined financial statements.


Combined Statements of ActivitiesYears Ended June 30, 2015 and 2014

OPERATING REVENUE AND SUPPORT 2015 2014

Annual meeting and conventions $ 33,692,007 $ 32,722,049

Conferences, forums and seminars 6,657,740 6,205,875

Membership dues 6,148,285 5,909,077

Professional development, publications and other service products 787,290 735,137

Interest and dividends 770,133 719,032

Membership affinity services 720,220 625,815

Air traffic service fees 490,028 469,285

Contributions and other income - 121,632

Total Operating Revenue and Support 49,265,703 47,507,902

OPERATING EXPENSES

Program services

Conventions, conferences, forums, and seminars 19,463,291 20,065,575

Operations 7,962,772 8,297,339

Communications 5,119,681 4,844,995

Membership marketing 3,918,372 3,708,577

Government affairs 2,951,263 3,308,525

Total program services 39,415,379 40,225,011

Supporting services

General administration and governance 4,067,373 2,344,703

Total supporting services 4,067,373 2,344,703

Total Operating Expenses 43,491,752 42,569,714

Change in unrestricted net assets from operations 5,773,951 4,938,188

OTHER ACTIVITIES

Postretirement benefit-related changes other than net periodic

postretirement benefit cost (110,983) (102,176)

Net realized and unrealized (losses) gains on investments (223,633) 1,791,380

Change in unrestricted net assets, before minority interest 5,439,335 6,627,392

Minority interest (3,219,410) (2,932,163)

Change in unrestricted net assets 2,219,925 3,695,229

Unrestricted net assets, beginning of year 13,274,155 9,578,926

Unrestricted net assets, end of year $ 15,494,080 $ 13,274,155



Combined Statements of Cash FlowsYears Ended June 30, 2015 and 2014

CASH FLOWS FROM OPERATING ACTIVITIES 2015 2014

Change in unrestricted net assets $ 2,219,925 $ 3,695,229

Adjustments to reconcile change in net assets to net cash provided by operating activities:

Depreciation and amortization 299,131 257,143

Bad debt recovery (22,582) (37,479)

Net realized and unrealized losses (gains) on investments in

marketable securities 223,633 (1,791,380)

Minority interest 3,219,410 2,932,163

(Increase) decrease in assets

Accounts receivable 285,340 385,678

Prepaid expenses and other assets 302,364 (12,182)

Increase (decrease) in liabilities

Accounts payable and accrued expenses 1,023,234 262,749

Deferred revenue - membership dues 204,938 472,580

Deferred revenue - conventions, seminars, business forums and other 1,863,259 (254,363)

Deferred rent 289,659 1,750,378

Accrued postretirement benefit obligation 78,889 (148,959)

Net Cash Provided by Operating Activities 9,987,200 7,511,557

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of furniture and equipment (60,797) (1,618,318)

Purchases of investments in marketable securities (7,254,880) (10,950,929)

Proceeds from sales of investments in marketable securities 5,474,501 10,396,177

Net cash used in investing activities (1,841,176) (2,173,070)

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment on the margin loan - (750,000)

Capital distributions - LLC Member (2,932,163) (3,039,047)

Net Cash Used in Financing Activities (2,932,163) (3,789,047)

Increase in cash and cash equivalents 5,213,861 1,549,440

Cash and cash equivalents, beginning of year 18,189,420 16,639,980

Cash and cash equivalents, end of year $ 23,403,281 $ 18,189,420



Notes to Combined Financial Statements1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization

National Business Aviation Association, Inc. (NBAA) is a business as-sociation of organizations that own or operate aircraft in the conduct of their business or provide services to the owners of business aircraft. NBAA was organized in 1947 for the purpose of furthering the cause of safety and economy of business aircraft operators. NBAA’s activities are funded primarily by meeting exhibit rental fees, static display fees, registration fees and sponsorships. Additionally, NBAA funds its opera-tions from membership dues, professional development, publications and service fees.

NBAA Charities raises funds to support a number of philanthropic organizations and initiatives that use general aviation airplanes for humanitarian purposes.

EBACE, LLC (EBACE) was formed in 2001 by NBAA and European Business Aviation Association (EBAA) with each party having a 50 percent ownership interest. EBACE conducts the European Business Aviation Convention and Exhibition, which is the premier European business aviation event and the annual meeting place for the European business aviation community. The exhibition is also the larg-est European educational event in the aviation industry. The exhibition is a three-day event held in Geneva, Switzerland.

NBAA-ABACE China Limited (NBAA China) was established in April 2014 in China to host conferences and exhibitions; in particular the Asian Business Aviation Conference and Exhibition (ABACE) show. NBAA China is 100 percent owned by NBAA.

Basis of Combination

The combined financial statements are presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and have been prepared on the accrual basis of ac-counting and include the accounts of NBAA, NBAA Charities, EBACE, and NBAA China (collectively referred to as “the Association”). NBAA Charities and NBAA China have been combined as required under GAAP due to the presence of common control. As a result of the overall management function by NBAA for EBACE, combined state-ments are presented. All intercompany balances and transactions have been eliminated in the combination.

Cash and Cash Equivalents

The Association considers all highly liquid instruments, which are to be used for current operations and which have an original maturity of three months or less, to be cash and cash equivalents. All other highly liquid instruments, which are to be used for the long-term purposes of the Association, are classified as investments in market-able securities.

Accounts Receivable

Accounts receivable consists primarily of amounts due from the sale of exhibit space, sponsorships, advertising, publications, and convention registrations. The allowance method is used to determine the uncollect-ible amounts. The allowance is based upon prior years’ experience and management’s analysis of subsequent collections.

Investments in Marketable Securities

Equity securities and all debt securities are carried at readily determinable fair values. Interest, dividends, unrealized and realized gains and losses are included in the combined statements of activities.

Furniture and Equipment

Furniture and equipment are recorded at cost. The Association capitalizes all expenditures for furniture and equipment over $500. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets ranging from three to seven years. Leasehold improvements are amortized using the straight-line method over the shorter of the useful life of the as-set or the remaining term of the lease. When assets are sold or oth-erwise disposed of, the asset and related accumulated depreciation and amortization are removed from the accounts, and any remaining gain or loss is included in operations. Repairs and maintenance are charged to expense when incurred.

Deferred Revenue

Deferred revenue consists of membership dues and amounts received to reserve exhibit booth space and registration fees for conventions, conferences, seminars and forums. The Association recognizes related revenues when the conventions, conferences, seminars and forums occur. Membership dues are recognized on a pro rata basis over the annual membership period.

Unrestricted Net Assets

Unrestricted net assets are available for use in general operations.

Revenue and Expense Recognition

Revenue and support are recognized in the year in which they are earned, and expenses are recognized when incurred. Expenses paid in advance and not yet incurred are deferred to the applicable period.

Unconditional promises to give (contributions) are recognized as revenues and assets in the period the promise is received. Conditional promises to give are recognized when the conditions on which they depend are substantially met.

Functional Allocation of Expenses

The costs of providing various programs and other activities have been summarized on a functional basis in the combined statements of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited.


Use of Estimates

The preparation of the combined financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Financial Instruments and Credit Risk

Financial instruments which potentially subject the Association to concentrations of credit risk consist principally of cash and cash equivalents and investments held at creditworthy financial institu-tions (see Note 3). Credit risk with respect to accounts receivable is limited because the Association deals with a large number of customers over a wide geographic area.

Fair Value Measurements

Financial instruments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 4 for discussion of fair value measurements.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Ac-counting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP.

The FASB recently issued ASU 2015-14 to defer the effective date of its revenue recognition standard by one year. For non-public entities the standard is effective for annual fiscal years, beginning after Dec. 15, 2018. Management is currently evaluating the impact the standard will have on the combined financial statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Finan-cial Statements – Going Concern (Subtopic 205-40): Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The update provides guidance about, management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern. The update also provides related disclosures. The guidance is effective for annual pe-riods ending after Dec. 15, 2016. Presently the Association does not anticipate that the adoption of this update will have a material effect on the Association’s combined financial statements.

2. INCOME TAXES/TAX STATUS NBAA has been granted an exemption by the Internal Revenue Service (IRS) from Federal income taxes under the provisions of Section 501(c)(6) of the Internal Revenue Code (IRC), except for any relevant tax on lobbying activities and unrelated business income. NBAA is required to report unrelated business income to the IRS and the District of Colum-bia. NBAA earns unrelated business income on advertising revenue. NBAA had no income tax expense for the years ended June 30, 2015 and 2014 as expenses were greater than revenue.

NBAA Charities has received a determination letter from the IRS that they are not subject to income tax on their exempt activities under Sec-tion 501(c)(3) of the IRC. NBAA Charities had no sources of unrelated business income during the years ended June 30, 2015 and 2014.

NBAA China is a Chinese entity that performs services outside the United States. As such, they are not required to file a US tax return.

EBACE is a two-member limited liability company and is treated as a partnership pursuant to Treasury Regulation Section 301.7701-3 for federal income tax purposes. Generally, partnerships are not subject to entity-level federal or state income taxation and, as such, EBACE is not required to provide for income taxes under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740, Accounting for Income Taxes.

The Association must recognize the tax benefit associated with tax po-sitions taken for tax return purposes when it is more-likely-than-not that the position will be sustained. The Association’s management believes it has no material uncertain tax positions and; accordingly, it will not recognize any liability for unrecognized tax benefits. For the years ended June 30, 2015 and 2014, the Association did not recognize any interest or penalties.

The tax years ended June 30, 2011 through 2014, remain open to examination by the taxing jurisdictions to which the Association is sub-ject, and they have not been extended beyond the applicable statute of limitations. No examinations are currently in process.

3. CONCENTRATION OF CREDIT RISK Financial instruments which potentially subject the Association to concentrations of credit risk consist principally of cash and cash equivalents and investments in marketable securities held at creditworthy financial institutions. At June 30, 2015 and 2014, bank balances in U.S. banks of approximately $22 million and $18 mil-lion, respectively, exceeded FDIC insurance limits. The Association has approximately $1 million and $0 at June 30, 2015 and 2014, in foreign bank accounts which are not insured. The Association has not incurred any losses due to the credit risk on these instruments.


4. FAIR VALUE MEASUREMENTS The Association follows the provisions of FASB ASC 820, Fair Value Measurement, in accounting for fair value measurements. ASC 820 establishes a common definition for fair value to be applied under GAAP requiring use of fair value, establishes a framework for measuring fair value, and expands disclosures about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available.

Observable inputs are inputs that market participants operating within the same marketplace as the Association would use in pricing the Association’s asset or liability based on independently derived and observable market data. Unobservable inputs are inputs that cannot be sourced from a broad active market in which assets or liabilities identical or similar to those of the Association are traded.

The input hierarchy is broken down into three levels based on the degree to which the exit price is independently observable or deter-minable as follows:

Level 1 – Valuation based on quoted market prices in active markets for identical assets or liabilities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Level 2 – Valuation based on quoted market prices of investments that are not actively traded or for which certain significant inputs are not observable, either directly or indirectly.

Level 3 – Valuation based on inputs that are unobservable and reflect management’s best estimate of what market participants would use as fair value.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. In determining the appropriate levels, man-agement performs a detailed analysis of the assets and liabilities that are subject to fair value measurements. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs are classified as Level 3.

Level 3 – Valuation based on inputs that are unobservable and reflect management’s best estimate of what market participants would use as fair value.

The table below sets forth those assets measured at fair value as of June 30, 2011 on a recurring basis:

Fair value measurement at reporting date using: Description

Money market funds Investment grade fixed income Other fixed income US equity securities Non-US equity securities Currency structured securities Large cap – equity securities Mid cap – equity securities Small cap – equity securities Global equity securities Asset allocation – equities Life cycle funds

Total

Quoted prices in active markets for identical assets (level 1)

$ 131,924 6,164,866 2,547,851 8,868,477 4,805,603 465,276 427,664 52,801 38,627 75,215 337,840 37,324

$ 23,953,468

Significant other

observable inputs (level 2)

$ - -- - ---- -- --

$ -

Significant other

unobservable inputs (level 3)

$ - - - - - - - - ---

$ -

Balance as of June 30, 2015

$ 131,924 6,164,866 2,547,851 8,868,477 4,805,603 465,276 427,664 52,801 38,627 75,215 337,840 37,324

$ 23,953,468

The table below sets forth those assets measured at fair value as of June 30, 2015, on a recurring basis:


The balance of the Association’s assets measured at fair value as of June 30, 2015 and 2014, are classified in the combined statements of financial position as follows: Investments in marketable securities Deferred compensation investments

2015

$ 22,853,2171,100,251

$ 23,953,468

2014

$ 21,296,4711,074,694

$ 22,371,165

5. INVESTMENTS IN MARKETABLE SECURITIESInvestments in marketable securities, at fair value, consist of the following at: June 30, Money market funds Investment grade fixed income Other fixed income U.S. equity securities Non-U.S. equity securities Currency structured securities

2015

$ 26,6326,164,866 2,522,3638,868,4774,805,603

465,276$ 22,853,217

2014

$ 9,402 5,863,1922,378,2408,510,7894,534,848

2,469,19-0-$ 21,296,471

Investment income consists of the following: Years ended June 30, Interest and dividends Unrealized (losses) gains Realized gains

2015

$ 770,132 (600,572)

376,939$ 546,499

2014

$ 719,032 614,972

1,176,408$ 2,510,412

Investment fees included in expenses amounted to $151,601 and $144,621 for the years ended June 30, 2015 and 2014, respectively.

6. FURNITURE AND EQUIPMENTFurniture and equipment consists of the following at: June 30, Furniture and equipment Hardware Software Leasehold improvements Exhibit booths

Less: accumulated depreciation and amortization

2015

$ 496,015499,810514,495

1,287,693671,905

3,469,918

(1,881,403)$ 1,588,515

2014

$ 490,873455,265503,385

1,287,693671,905

3,409,121

(1,582,272)$ 1,826,849

Depreciation and amortization expense was $299,131 and $257,143 for the years ended June 30, 2015 and 2014, respectively.

7. POSTRETIREMENT BENEFITSThe Association provides postretirement health care benefits (the Plan) to certain retired employees. Active employees become eligible for benefits after meeting certain age and service requirements. The Plan is contributory for employees under the age of 65 and for employees over age 65 who retire after Dec. 31, 2006. The Plan is unfunded. Effective Jan. 1, 2006, the Plan no longer accepts new participants.

The following table sets forth the Plan’s funded status: June 30, Postretirement benefit obligation, beginning of year Interest cost Service cost Actuarial loss (gain) Benefits paid Postretirement benefit obligation, end of year

2015

$ 1,790,72187,08435,48918,558

(62,242)

$ 1,869,160

2014

$ 1,939,23083,58034,838

(197,404)(69,973)

$ 1,790,271

Fair value measurement at reporting date using:

Description

Money market funds Investment grade fixed income Other fixed income US equity securities Non-US equity securities Large cap – equity securities Mid cap – equity securities Small cap – equity securities Global equity securities Asset allocation – equities Life cycle funds

Total

Quoted prices in active markets for identical assets (level 1)

$ 159,582 5,863,192 2,407,763 8,510,789 4,534,848 286,144 59,579 111,427 63,789 362,151 11,901

$ 22,371,165

Significant other

observable inputs (level 2)

$ - - - ---- - -- -

$ -

Significant other

unobservable inputs (level 3)

$ - - - - - - - -- --

$ -

Balance as of June 30, 2014

$ 159,582 5,863,192 2,407,763 8,510,789 4,534,848 286,144 59,579 111,427 63,789 362,151 11,901

$ 22,371,165

The table below sets forth those assets measured at fair value as of June 30, 2014, on a recurring basis:


Accumulated postretirement benefit obligation for amounts due for retired and active employees consist of the following: June 30, Accrued postretirement benefit obligation - postretirement liability: Active participants, not yet eligible Fully eligible active participants Retirees, disabled and dependents Accrued postretirement benefit obligation

2015

$ 1,790,721481,798379,867

1,007,495

$ 1,869,160

2014

$ 1,939,230490,896375,336924,039

$ 1,790,271

Amounts recognized in the Association’s combined statements of financial position consist of the following: June 30, Accrued postretirement benefit obligation - postretirement liability: Current Non-current Accrued postretirement benefit obligation Postretirement benefit obligation, end of year Fair value of plan assets Unfunded status (accrued postretirement benefit obligation)

2015

$ 89,0001,780,160

$ 1,869,160

$ 1,869,160-

$ 1,869,160

2014

$ 85,0001,705,271

$ 1,790,271

$ 1,790,271-

$ 1,790,271

The accrued postretirement benefit obligation is included in the accompanying combined statements of financial position.

Items not yet recognized as a component of net periodic postretirement benefit cost: Years ended June 30, Transition obligation Prior service credit Net actuarial gain Net periodic postretirement benefit costs

2015

$ -510,557313,739

$ 824,296

2014

$ -641,787293,492

$ 935,279

Components of net periodic postretirement cost in the accompanying combined statements of activities: Years ended June 30, Service cost Interest cost Amortization of unrecognized prior service credit Components of net periodic postretirement benefit costs

2015

$ 35,48987,084

(131,231)

$ (8,658)

2014

$ 34,83883,580

(131,231)

$ (12,813)

Amounts paid by the Association for retiree post-retirement benefits during the year ended June 30, 2015 and 2014, were $62,242 and $69,973, respectively.

Weighted average assumptions used to determine the benefit obligation are as follows: Years ended June 30, Discount rate Rate of compensation increase Initial health care cost trend Ultimate health care cost trend Probability of retiree electing coverage

2015

4.75%N/A

6.50%5.00% (2023)

100%

2014

4.75%N/A

6.75%5.00% (2022)

100%

The health care cost trend rate assumption has a significant effect on the amounts reported in the accompanying combined financial statements. If the assumed rates were to increase or decrease by one percentage point in each year, it would increase or decrease the postretirement benefit obligation as of June 30, 2015, by $312,066 and ($251,303), respectively.

Contributions

As the plan is unfunded, contributions are expected to be equivalent to future estimated benefit payments. Accordingly, for the year end-ing June 30, 2016, the Association expects to contribute approxi-mately $89,000 to its postretirement healthcare benefit plan.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid: Years ending June 30, 2016 2017 2018 2019 2020 Thereafter

$ 89,000 90,000 93,00092,00093,000

423,000

Given the estimates included in the calculation of this accumulated benefit obligation, it is possible amounts recorded under the Plan may change in the near term.

8. DEFERRED COMPENSATIONDuring fiscal year 2007, the Association established a nonqualified deferred compensation plan (a “457(b) plan”) for senior executives and other management or highly compensated employees. The As-sociation holds assets totaling $1,100,251 and $1,074,694 as of June 30, 2015 and 2014, respectively, which are reported as deferred com-pensation investments and a deferred compensation liability in the accompanying combined statements of financial position. The assets are subject to the claims of general creditors. The investments of the trust are held in separate accounts for investment purposes, but are designated by the Board for use to satisfy this deferred compensa-tion liability. All contributions to the plan are from employees and no contributions have been made by the Association for the years ended June 30, 2015 and 2014. Investment gains and losses from the de-ferred compensation investments are recorded directly to the asset account and the corresponding liability account.


9. MARGIN LOANIn December 2011, the Association executed a margin loan autho-rization agreement with a financial institution. The Association can borrow up to 50 percent of the balance of the securities held at the institution. The margin loan bears interest at the 30-day LIBOR rate plus 190 basis points. The loan is secured by securities held in accounts at the same financial institution. The loan and interest is payable on demand. There were no borrowings on the margin loan during the years ended June 30, 2015 and 2014, and no outstanding balance as of June 30, 2015 and 2014.

10. COMMITMENTS AND CONTINGENCIES Operating Lease

In January 2013, the Association terminated its lease at its administra-tive office space in Washington, DC in March 2013, the Association signed a new lease through December 2024. The Association made a security deposit of $74,829 which is included in prepaid expenses and other assets on the accompanying statements of financial position. Under the new lease agreement, the Association received sixteen months of free rent, which will be amortized over the life of the lease, on a straight-line basis. The amortization of rent abatement is shown as a reduction in future minimum lease payments. The first payment began in January 2015. The lease also provided a tenant improvement allowance of $1,451,587 which was used for leasehold improvements and furniture. The tenant improvement allowance is amortized over the shorter of the lease or the asset life. A related liability was recorded and the amount is being amortized over the term of lease as a reduction to rent expense. The Association began to amortize the leasehold improve-ments and the related liability when the Association took physical pos-session of the office space in August 2013.

Future minimum rental payments, by year and in the aggregate, under the operating lease for the office space are as follows: Years ending June 30, 2016 2017 2018 2019 2020 2021-2024

$ 906,932925,071943,572962,444992,189

4,762,402$ 9,492,610

Rent expense for the year ended June 30, 2015 and 2014, were $740,997 and $757,378, respectively.

Commitments for Convention and Conference Facilities

The Association is committed under agreements for conventions, conferences and hotel space through the year 2020. The total com-mitment under the agreements is not determinable as it depends upon attendance and other unknown factors. In the event that the Association cancels the agreements, the Association may be subject to liquidating damages.

Contingency

NBAA holds the ABACE in China. ABACE is 100 percent owned by NBAA. Both ABACE and EBACE are overseas conventions and these

shows incur risks such as currency fluctuation, foreign taxes and foreign country political issues. The Association does not believe that either ABACE or EBACE have incurred any liability related to these risks that is probable and can be valued not already included in the combined financial statements.

11. EMPLOYEE RETIREMENT PLANDuring the year ended June 30, 1998, the Association established the National Business Aviation Association, Inc. 401(k) Profit Sharing Plan and Trust (the Plan) for all eligible employees. All Plan participants have the option of deferring a percentage of their annual salary, subject to IRS limitations. The Association may match a portion of the salary de-ferred by each employee. For the years ended June 30, 2015 and 2014, the Association contributed $922,813 and $889,425, respectively.

12. RELATED PARTIESThe Association is a member of the International Business Aviation Council (IBAC) along with fourteen other aviation member groups. Administrative, overhead and direct costs are borne by IBAC member groups through assessments. Costs incurred by the Association to support IBAC were $442,638 and $655,672 for the years ended June 30, 2015 and 2014, respectively.

The National Business Aviation Association, Inc. Political Action Committee (NBAA PAC) is a non-profit political association that was registered with the Federal Election Commission on June 17, 1996. Administrative, overhead and direct costs incurred by NBAA PAC during the years ended June 30, 2015 and 2014, are immaterial and; therefore, are not included in the combined financial statements.

The Association is a member of the Alliance for Aviation Across Amer-ica (AAAA). AAAA is a diverse coalition of aviation enthusiasts and professionals, local airports, and civic organizations representing rural and agriculture voices, city, county and state officials, economic devel-opment entities, non-profit organizations, small and mid-size business-es and others dedicated to protecting small and rural communities. AAAA is dedicated to properly modernizing America’s air traffic control system to enhance safety, promote efficiency and expand capacity in order to ensure all Americans have access to air transportation. During the years ended June 30, 2015 and 2014, NBAA contributed $558,000 and $590,000, respectively, to support AAAA.

13. SUPPLEMENTAL CASH FLOW INFORMATION During the years ended June 30, 2015 and 2014, the Association’s landlord paid $0 and $1,134,851, respectively, in tenant improvements and the purchase of furniture as part of the lease agreement discussed in Note 10. This is a non-cash transaction which resulted in an increase in leasehold improvements, furniture and deferred lease obligations.

14. SUBSEQUENT EVENTS The Association evaluated subsequent events through Sept. 21, 2015, which is the date the combined financial statements were available to be issued. There were no additional events noted that required adjust-ment to or disclosure in these combined financial statements.


NBAA Board of Directors

As of March 1, 2016

PAUL ANDERSONNBAA ChairmanUTFlight

LLOYD “FIG” NEWTONNBAA Vice Chairman/TreasurerL-3 Communications

EDWARD M. BOLENNBAA President and CEO

WILLIAM S. AYERHoneywell

ELIZABETH DORNAKDuPont Aviation

RONALD DUNCANGeneral Communication, Inc.

TODD DUNCANDuncan Aviation

GREG EVANSUniversal Weather & Aviation, Inc.

DAVID EVERITTHarsco Corporation

LESLIE KENNEOshkosh Corporation

MONTE J.M. KOCHFalconshare LLCAuction.com

SCOTT A. MOORELuck Companies

DOUGLAS SCHWARTZConocoPhillips

JIM SCHWERTNERSchwertner Farms

RICHARD SHINEManitoba Corp.

RICH WALSHHewlett-Packard Company

JOHN WHITEValero Energy

BENJAMIN SCHWALENNBAA Corporate Secretary


NBAA Associate Member Advisory CouncilThe Associate Member Advisory Council (AMAC) exists to help NBAA define the relationship among all segments of the membership; to recommend programs that would improve communications between those segments; and to advise the NBAA Board of Directors on areas of interest to Associate members.

Greg EvansAMAC ChairmanUniversal Weather and Aviation, Inc.

Todd DuncanAMAC Vice ChairmanDuncan Aviation

Michael AmalfitanoStonebriar Commercial Finance, LLC

George AntoniadisPlaneSense, Inc.

Dave ArmstrongEmbraer Executive Jets

Sheryl BardenAviation Personnel International

Joseph BraunsteinMarsh

Joseph Carfagna Jr.Leading Edge Aviation Solutions

David DavenportFlightSafety International

Dan DrohanSolairus Aviation

Kent JacksonJackson & Wade, LLC

Martha KingKing Schools, Inc.

David LongridgeBoeing Business Jets

Joseph MoeggenbergARGUS International

Bill NoeNetJets

Michel OuelletteBombardier Aerospace

John RosanvallonDassault Falcon Jet Corporation

Maria SastreSignature Flight Support

Michael ThackerTextron Aviation

Derek ZimmermanGulfstream Aerospace Corporation


NBAA Staff

Office of the President

Ed BolenPresident and Chief Executive Officer

Steve HadleyDirector, Regional ProgramsSouthwest Regional Representative

Stacy HowardWestern Regional Representative

Kristi IveyNorthwest Regional Representative

Kevin McKeeExecutive Assistant to the Office of the President

Bob QuinnCentral Regional Representative

Dean SaucierNortheast Regional Representative

Greg VoosSoutheast Regional Representative

Communications

Dan HubbardSenior Vice President, Communications

Joe AdkinsManager, Web Development & Operations

Chantal AlmonordDatabase Systems Administrator

Rhonda BowmanDatabase Analyst

Erika FreberArt Direction, Design & Photography

Kurt GraberManager, Web Development & Operations

Quang NguyenSenior Manager, Web Development & Operations

Andrew ReillyCommunications Editor

Beth SandersOnline Editor

Robert A. SearlesManaging Editor

Jessica SmithManager, Web Design

Amy Freed StalzerEditorial Director

Jason WolfDirector, Internet Communications

Todd WormingtonDirector, Information Technology

Conventions & Membership

Chris StrongSenior Vice President, Conventions & Membership

Coryn AlvarezAdministrative Assistant, Exhibits

David BascombMarketing Analyst

Maureen CameronDirector, Exhibit Sales, Services & Operations

Ruqayyah DaudMember Services Representative

Margo DeMarkSenior Manager, Membership

Courtney EastonSenior Manager, Marketing

Dina GreenDirector, Conferences & Forums

Sierra GrimesManager, Registration

John HadlockMember Services Representative

Patrick HallerDirector, Membership & Member Services

Joe HartDirector, Static Displays

Rhonda HughesManager, Exhibits

Aimee KaufmanDirector, Marketing

Kirby KonzProject Manager, Marketing

Paige KronerDirector, Special Events, Budget & Customer Service

Eddie KyleMarketing Traffic Manager

Samantha LohseProject Manager, Marketing, Conventions & Forums

Cecilia MontanoProject Manager, Event Marketing

Emily NielsonCoordinator, Advertising & Sponsorships

Cheryl PadillaVice President, Administrative Affairs, Conventions

Linda PetersVice President, Exhibits


Benjamin SchwalenCounsel & Corporate Secretary

Rachel ThomasManager, Exhibits

Tracy TippettManager, Static Displays

Government Affairs

Dick DoubravaVice President, Government Affairs

Christa FornarottoVice President, Government Affairs

Scott O’BrienSenior Manager, Finance & Tax Policy

Operations & Administration

Steve BrownChief Operating Officer

Tyler AustinProfessional Development Coordinator

Greg BachtiarSenior Staff Accountant

Melley BerhaneStaff Accountant, Accounts Receivable

Doug CarrVice President, Regulatory & nternational Affairs

Chris CherkisManager, Conferences & Seminars

Holly ClarkChief People Officer

Pam CohenStaff Accountant, Accounts Payable

Eli Cotti, CAMDirector, Technical Operations

Jo DamatoDirector, Educational Development & Strategy

Linda EatonDirector, Office & Support Services

Jay Evans, CAMDirector, Professional Development

Marc FreemanChief Financial Officer

Alex GertsenDirector, Airports & Ground Infrastructure

Kara HamlettMeetings Coordinator

Jamie KaneSpecialist, Air Traffic Services

Brian KoesterProject Manager, Operations

Peter KornsProject Manager, Operations

John KosakWeather Specialist, Air Traffic Services

Bob LamondDirector, Air Traffic Services & Infrastructure

Mark LarsenSenior Manager, Safety & Flight Operations

Jim McClayProject Manager, Air Traffic Services

Mike Nichols, CAMVice President, Operational Excellence & Professional Development

Sal PuelloControllerCheryl RichardsStaff Accountant, Accounts Receivable

Shirley RoseSenior Support Services Coordinator

Cheri RuddManager, Office Coordination

Michael SchwabSpecialist, Air Traffic Services

Dean SnellManager, Air Traffic Services

Ernie StellingsSenior Manager, Air Traffic Services

Michele TernerSenior Manager, Human Resources

Marie WilkinsExecutive Assistant

James WilliamsMailroom Coordination &Inventory Control

Sarah WolfSenior Manager, Security & Facilitation

As of March 1, 2016

About NBAA

Founded in 1947 and based in Washington, DC, the National Business Aviation Association (NBAA) is the leading organization for companies that rely on general aviation aircraft to help make their businesses more efficient, produc-tive and successful. The association represents more than 11,000 member companies of all sizes and located across the country. NBAA provides more than 100 products and services to the business aviation community, including the NBAA Business Aviation Convention & Exhibition, the world’s largest civil aviation trade show.

National Business Aviation Association

1200 G Street NW, Suite 1100

Washington, DC 20005

www.nbaa.org

Download the NBAA Annual Report

Documents

Transcript of Download the NBAA Annual Report