Dear Members,

I am pleased to present our Fiscal Year 2011 budget. FY2011 runs from July 1st, 2010 through June 30th, 2011. This budget includes a 32% increase in revenue to $4.2 million and a slightly smaller increase in expenses. Three-fourths of this increase comes from Summit related activities such as registration and sponsorship and the rest of other activities such as advertising and the SQLRally event. In the sections below I’ve laid out some of the major changes from last year’s budget.

Revenues
Fiscal year 2010 was a difficult year for many organizations. Correspondingly, the Board passed a budget with a very conservative $3.2 million revenue estimate. Our FY2011 budget increases that revenue estimate to $4.2 million. This increase is broken down into several buckets.

1. The largest increase is a $694,000 increase in Summit registration from attendees. That’s a nearly 40% increase over last year. The Board and marketing set the attendance target and finance derives an average revenue per attendee based on previous years. In May and June when we’re building the budget we have access to our early registration numbers and the registration trends from previous years. As this is a budget we still tend to estimate on the conservative side. The registration trend through the time I’m writing this letter supports our budget estimates.


2. The Board increased the budget for Summit and Expo sponsorship from $502,000 to $536,000. This number is provided by the group that sells the sponsorships and Board generally accepts it. Based on our sales so far this year we should easily achieve this number.


3. The budget for Summit Program increased from $48,000 to $85,000. This comes from the sales of conference DVDs. These did very well in FY2010 and exceeded our budget significantly. This is a large increase in the budget but a very small increase over what we actually achieved last year. This number is based on the percentage of Summit attendees that purchase the DVD sets and is based on previous year trends.


4. The budget for Summit Pre and Post Conference sessions is flat at $384,000. In FY2010 we switched from two pre-conference days to one day of pre-conference sessions and one day of post-conference sessions. A combination of that schedule change and the economic situation led to reduced pre and post conference attendance relative to overall attendance. In FY2011 we used that percentage to forecast based on our expected attendance and came up with our budget.


5. Our expected revenue for the European event increased slightly to $286,000. This number is provided by the volunteers and Management Company in Europe that organizes the event and the Board usually accepts it.


6. Our advertising budget increased from $20,000 to $60,000. This is mostly banner advertising on the web site. We’ve seen continued growth in this area and expect that we will achieve this number. This number is provided by the group that sells the advertising and the Board generally accepts it.


7. Our Miscellaneous revenue budget increased from $230,000 to $410,000. This increase comes from the expected revenue from the SQLRally event being held in the spring. The remaining revenue in this category comes from various sponsorships that aren’t part of any category above. For example, the 24 Hours of PASS sponsorship would be included in this bucket.

In summary our budget shows a 29% increase in Summit related revenue driven by increased attendance. We expect non-Summit revenue to increase by 48% due the SQLRally event, increased advertising activity and a larger European event.

Expenses
As we have in the past, the Board spent more time on the expenses than any other part of the budget. As I write this letter I’m looking at version thirty-one of our budget spreadsheet. Many, many hours were spent looking for expenses that we could live without and trying to increase our budget for the activities we felt were most important. Some of significant changes we made this year include:

1. Explicitly budgeting money for reserves. In the past we’ve budgeted profits and then taken a percentage of those and added them to our financial reserves. This year we included a budget line item to contribute $50,000 to reserves. We think this is an important step in guaranteeing the future financial security of the organization.


2. Budgeting for special projects. In the past when we had a good idea during the year we rarely had any money to do anything about it. In FY2011 we have a $40,000 budget plus a bucket of staff time for any special projects that come up. We don’t know what these will be yet. We do know that we have the resources available to take advantage of any opportunities that come up during the year.


3. Increasing staff resources. Our overall costs for staff have increased because we’ve added additional people. The Board voted to hire additional staff to support IT and our community activities.


4. Board Meetings. In FY2010 our initial budget didn’t include any in-face Board meetings. After the success of the Summit we were able to schedule a Board meeting at the end of the fiscal year. For FY2011 we have two in-face Board meetings scheduled.


5. Along with the revenue from the SQLRally event we have also have to include the event’s expenses which we estimate at $161,000.


6. In FY2011 the Board was able to increase our funding for community events. We increased the budget for Chapters from $86,000 to $117,000 and the budget for Virtual Chapters from$12,500 to $40,500.

Many other areas of the budget also received small increases as we attempted to put back some of the cuts made during FY2010.

Profit
Our final budget shows a profit of $65,381 or roughly 1.5% of revenue. This doesn’t include our $50,000 budgeted contribution to reserves. Our goal is to budget close to breakeven while giving ourselves a cushion for any unexpected emergencies.

Bill Graziano
Executive Vice President - Finance

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Dear Members,

I am pleased to present our financial results from 2010. The PASS 2010 fiscal year ran from July 1st, 2009 through June 30th, 2010 and included the November 2009 Summit. Remember that this was still an economically challenging time for PASS and our members.

FY2010 saw some significant departures from the budget we originally published. We originally budgeted for expenses and revenues of $3.2 million and an overall loss of $14,000. That was roughly a break-even budget.

Our actual revenues and expenses were $3.9 million with a profit of $15,000. The following is a brief summary of the individual areas where we were more than $25,000 off from our original budget.

R2 Launch Event

PASS held five Microsoft sponsored SQL Server 2008 R2 launch events in conjunction with our chapters. We incurred the expenses for these and were reimbursed by Microsoft's sponsorship. This resulted in an additional $360,000 of revenue and expenses for the organization. These are all captured in the "R2" portfolio. These events were planned and executed to be break-even for the organization.

Summit

Our original budget estimate for the Summit was conservative after the economic challenges of 2008. However, our Summit registration exceeded budget by $143,000 which also led to increased food costs of $30,000. A number of other areas related to the Summit were also different than we budgeted.

1. Exhibitor revenue was down $58,000.
2. Hotel commission revenue was $45,000 under budget and attrition on the room block totaled $37,000. PASS commits to room blocks years ahead of the Summit. This is the only way we can guarantee the availability of the thousands of rooms that we need. Since the room block is booked years before the Summit, this can lead to a mismatch between the size of our room block and the number of attendees we budget. When the rooms are used we receive a small commission. When we don't fill the rooms we are liable for their cost if the hotel can't fill them. Our 2009 Summit was a perfect storm of a room block booked years in advance and an economic downturn. We've reviewed our room block commitments going forward and are comfortable with them.
3. Pre-conference session revenue was down nearly $70,000. This also led to lower food costs by $41,000. This reduction was a combination of fewer people eating and a reduced cost per attendee.
4. Our original budget for selling Conference DVDs was extremely conservative at $5,000. We exceeded this by $38,000.
5. As part of their Summit sponsorship package Microsoft purchased $26,000 more in registrations than we'd budgeted.

Non-Summit Related

1. Our newsletter and web site advertising revenue was $70,000 higher than we'd budgeted. Much of this was enabled by earlier redesigns of the web site and newsletter.
2. The cost for management and staff at HQ was $120,000 higher than we'd budgeted. This is the result of hiring three additional people over the course of the year.
3. We had $26,000 of unbudgeted sponsorship revenue for the 24 Hours of PASS events.
4. There is a budgeted expense for minus $46,969 for "F&B (Comps)" with no related actual amount. This is an adjusting entry in the budget that we use to charge various portfolios for the food and beverage for their complementary registrations. We take the budgeted expenses out of the general Summit portfolio and move it into the various portfolios. The actual costs are then allocated to the portfolios. This number is left hanging around to make the totals add up. We could just reduce the F&B by this amount but we think it is clearer to keep this entry to show exactly what was done.
5. There is a web site amortization cost of $30,488 with no related budget. We were required to capitalize and depreciate the costs associated with developing the web site.
6. We budgeted $25,000 of sponsorship revenue and expenses around certification and working with Microsoft Learning. These plans didn't come to fruition so there was no revenue and no expense.

FY2010 saw PASS nearly cross $4 million in revenue and maintain its strong financial position in the challenging economic times. Our Summit attendance remains strong and non-Summit revenue continues to increase.

Bill Graziano
Executive Vice-President - Finance

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