Financials
THE CANADIAN REAL ESTATE ASSOCIATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended December 31, 2013
The following discussion and analysis of financial condition, and results of operations of The Canadian Real Estate Association (CREA) should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2013.
Auditors' Report and Financial Statements
Membership Fee and Revenue
|
2013 |
2012 |
2011 |
Membership |
109,103 |
106,944 |
104,440 |
Membership Fee |
$310 |
$290 |
$270 |
Membership Revenue |
$25,494.8 |
$24,212.0 |
$23,039.8 |
The 2013 membership increased by 2.0% over 2012. Revenue is higher in 2013 than 2012 as a result of the increased membership and the previously approved membership fee increase of $20.
Annual Information – Consolidated
Total revenue includes $1,073.6K from 200 Catherine Street. Total expenses also include Legal Defence Fund ($88.7K) and Futures Fund ($277.9K.)
|
2013 Actual |
2012 Actual |
2011 Actual |
Membership |
109,103 |
106,904 |
104,440 |
|
($000’s) |
($000’s) |
($000’s) |
Membership Revenue |
25,494.8 |
24,212.0 |
23,039.8 |
New Member Initiation Fee |
1,927.2 |
1,696.2 |
2,215.0 |
Total Revenue |
36,693.8 |
34,214.8 |
33,460.9 |
Total Expenses |
33,378.0 |
31,782.4 |
30,247.8 |
Net Revenue |
3,315.8 |
2,432.4 |
3,213.1 |
Fund Balances |
27,707.8 |
24,392.0 |
21,959.6 |
Expenses
The chart below outlines the actual expenses compared against budget and the previous year. In August the Board approved the 2014 budget and a three year strategic plan, 2014 to 2016. As a result, some projects were either not undertaken in 2013 or delayed to 2014.
|
Actual Dec. 31/13 |
Actual Dec. 31/12 |
External Relations |
850,731 |
785,112 |
Communications |
547,429 |
715,898 |
Legal |
609,596 |
777,814 |
National Ad Campaign |
7,096,230 |
5,760,170 |
Committees/Task Force |
1,288,592 |
1,063,097 |
Representation |
1,028,068 |
1,012,737 |
General Overhead |
1,409,907 |
1,368,963 |
External Relations:
The actual expense increased over 2012 due to increased work conducted on the REALTOR® Action Network, GIS mapping and the Quality of Life Symposium. The 2013 expenses was under budget due to savings in consulting fees and delay in certain stakeholder outreach initiatives.
Communications:
There are various research and survey expenses that were not incurred within the strategic communications budget resulting in savings on consulting fees and some of the budgeted items were handled internally rather than requiring external assistance.
Legal:
2013 expenses are slightly below budget as $120,000 for maintenance of the .mls domain was not needed as the domain name application is still pending.
Committees/Task Forces:
The 2013 expenses are above 2012 expenses due to costs incurred for expanded member outreach and governance review and related to the new Not-For-Profit Act.
Representation:
The 2013 expenses reflect reduced international expenses and increased member engagement activities.
|
2013 |
2012 |
2011 |
Total Salaries/Benefits |
9,517.2 |
8,926.9 |
8,146.1 |
Salaries/Benefits percent of Expenses |
28.5% |
29.4% |
26.8% |
The increase in salaries and benefits is related to the addition of staff resources and annual salary increases. CREA is consistently able to maintain the overall staff budget below 30% of total expenses, a benchmark for NPOs.
200 Catherine Street
CREA currently occupies 17,800 sq. ft. of the total 52,000 sq. ft. leasable space on the 4th, 5th , 6th and 7th floors.
There are no major variances of actual to budget to identify. The fit up of the common areas of the building that began in 2012 was completed in 2013.
Liquidity and Capital Resources
The Contingency Reserve Fund was reviewed. In accord with the policy of maintaining the Fund at four months operating expenses, an appropriation from the General Fund to the Contingency Reserve Fund in the amount of $1.0M was approved by the Board.
The Legal Defence Fund has been maintained at $2.0M this year and the Board approved a Building Reserve Fund to provide for up to $1.5M for anticipated tenant turnover. In 2013, $500K was appropriated to this fund.
The Futures Fund has a balance of $324,000 at the end of December 31, 2013 to provide for the Futures Implementation Team (FIT) to finalize their work up to the 2014 Annual General Meeting after which the FIT's ongoing operation will cease.
Risk Management
With the approval of the By-Law changes required under the new Not-For-Profit Act at the Special General Meeting in October, CREA received a copy of its certificate of continuance from Industry Canada on January 6, 2014.
