Financials
THE CANADIAN REAL ESTATE ASSOCIATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended December 31, 2015
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, 2015.
Auditors' Report and Financial Statements
Membership Fee and Revenue
|
2015 |
2014 |
2013 |
Membership |
114,660 |
110,759 |
109,103 |
Membership Fee |
$310 |
$310 |
$310 |
Membership Revenue |
$35,060.0 |
$33,318.7 |
$32,339.8 |
The 2015 membership increased by 3.5 % over 2014. Revenue is higher in 2015 than 2014 as a result of the increased membership.
Annual Information – Consolidated
Total revenue includes $705.2K from 200 Catherine Street. Total expenses include the Legal Defence Fund ($676.0K) and $799.9K from 200 Catherine Street.
|
2015 Actual |
2014 Actual |
2013 Actual |
Membership |
114,660 |
110,759 |
109,103 |
|
($000's) |
($000's) |
($000's) |
Membership Revenue |
35,060.0 |
33,318.7 |
32,339.8 |
New Member Initiation Fee |
1,990.0 |
1,838.3 |
1,541.8 |
Total Revenue |
39,133.3 |
37,432.3 |
36,693.8 |
Total Expenses |
36,608.6 |
35,901.9 |
33,378.0 |
Net Revenue |
2,524.7 |
1,530.4 |
3,315.8 |
Fund Balances |
31,662.9 |
29,238.2 |
27,707.8 |
Expenses
The chart below outlines the actual expenses compared against budget and the previous year. In August the Board approved the 2016 budget and a three year strategic plan, 2015 to 2017. As a result, some projects were either not undertaken in 2015 or delayed to 2016.
|
Actual Dec. 31/15 |
Actual Dec. 31/14 |
Government Relations |
1,088,211 |
859,306 |
Communications |
818,246 |
603,118 |
Legal |
212,233 |
456,144 |
IP Products and Services |
7,318,065 |
7,934,504 |
National Ad Campaign |
7,193,620 |
7,193,620 |
Committees/Task Force |
1,308,065 |
1,326,374 |
Representation |
867,198 |
940,809 |
General Overhead |
1,501,539 |
1,846,553 |
Government Relations:
Actual expenses for 2015 are higher than 2014 due to an emphasis on member engagement. Funding was dedicated to the Financial Advisory Task Force (FATF) audit process to engage and brief REALTOR® representatives.
Communications:
The actual expenses are higher than 2014 due to extensive member engagement through the CREA Open House initiative, as well as work done to update CREA's communication efforts and identify with members and external audiences.
Legal:
The actual expenses are below 2014 due to the elimination of the management fees for the .mls domain name which now come out of the MLS® Domain Name Fund. The majority of Competition related legal expenses have been allocated to the Legal Defence Fund.
ITS Products & Services:
The actual expenses for 2015 are consistent with 2014 expenses. These expenses relate to the direct costs for IT products/services: REALTOR Link®;REALTOR.ca; DDF®; mobile; ICX.ca; and the infrastructure that is required to maintain these products.
Committees/Task Forces:
The expenses are slightly below 2014 due to a Special General Meeting not being required in the fall. The year-end expenses are below budget as fewer meetings of the Association Executive Committee (AE), Canadian Commercial Committee (CC) and Technology Committee were called.
Representation:
The 2015 expenses are below budget and the 2014 expenses due to savings in travel expenses.
|
2015 |
2014 |
2013 |
Total Salaries/Benefits |
10,474.2 |
9,943.2 |
9,517.2 |
Salaries/Benefits percent of Expenses |
28.6% |
22.7% |
28.5% |
The increase in salaries and benefits is related to the addition of staff resources and annual salary increases.
200 Catherine Street
CREA currently leases 18,200 sq. ft. of the total 52,241 sq. ft. leasable space.
The revenues were lower than budgeted due to two tenants vacating the lower level and the third floor; however the revenue was still sufficient to cover operating costs.
The HVAC system was upgraded this year at a cost of $200K which reduced the accumulated Fund Balance. Significant savings have been recognized in hydro expenses as a result of the upgrade.
Liquidity and Capital Resources
The Contingency Reserve Fund was reviewed in accord with the policy of maintaining the Fund at four months operating expenses. As a result of this review, the Fund was maintained at its current year-end balance.
The Legal Defence Fund has been maintained at $2.0M this year and the Building Capital Reserve Fund has reached $1.5M for anticipated tenant turnover.
Risk Management
CREA has adopted a Corporate dashboard on which the financial related risk are consistently monitored: internal controls, membership base and associated revenues, global economic conditions and monitoring appropriate costs of services.