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WASHINGTON-After a number of years in the red, CUNA and subsidiary CUNA Strategic Services, Inc., have managed to claw its way back into the black. Greater efficiency efforts and leasing out excess office space were credited with affording the trade association $269,000 in net income last year. This figure represents a $2.6 million increase over 2002 and $1.3 million over 2001 when CUNA was in the negative. The income gave CUNA’s operating reserves a boost to $9.8 million at the end of 2003. “These positive results were fueled by a 10.5% increase in fee-based service net revenues combined with a 6.5% increase in dues income, the result of strong investment returns, and positive operating margins for the CUNA Councils,” CUNA’s Annual Report read. CUNA Vice President of Communications and Media Outreach Pat Keefe explained that this growth sprang from increased credit union membership and assets, which dues are based upon, and increased usage of CUNA’s fee-based services. Additionally, CUNA sold off CUNA Network Services to Liberty Internet Services and leased its old, vacant Washington, D.C. office space, which bolstered the trade’s income. CUNA and CSSI have combined cash and short-term investments of $14.9 million, working capital of $3.5 million, and members’ equity totaling $9.8 million, all of which increased over the previous year. Net revenue for the organizations came to $44.8 million, up 5% from 2002. Consolidated expenses were also up 5% reaching $44.8 million, up from $42.5 million. CUNA’s operating margin was $180,000, $109,000 better than the previous year. Dues supported services accounted for approximately 40% of income and cover things like lobbying, unity of the three-tier system, public relations, and research and policy analysis. Dues income was up $1.1 million from 2002 to $18.2 million. Though CUNA spent $428,000 more on dues supported expenses than in 2002, it was still $190,000 lower than was budgeted “due to close monitoring of expenses during 2003.” CUNA also took advantage of technology to Web cast some board and committee meetings and save on travel expenses. For 2004, CUNA has budgeted small increases in each category of dues-related spending, which have resulted in a slightly lower percentage of dues spent on the legislative and regulatory, communications and public relations, and research and policy categories. Unity of the three-tiered system and administration were up slightly as a percentage. Keefe explained that the changes were made in response to increased attacks by the bankers on credit unions’ tax exemption in the various states in 2003. CUNA expects to see the same activity levels from the bankers in 2004 and 2005, though the 2005 budget has not been developed yet. Fee-supported services grew to 60% of CUNA’s net revenue. CUNA and CSSI had combined growth of $2.2 million in net revenues for these services last year. The combined operating margin for fee-based services tallied nearly $500,000. In March, an independent audit by auditing firm BDO Seidman gave the opinion, “the consolidated financial statements present fairly, in all material respects, the financial position of Credit Union National Association and subsidiary as of Dec. 31, 2003 and 2002, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.” Looking into the future, the annual report read, “The 2004 CUNA and CSSI budgets set out reasonable and achievable financial goals for the organization. The overall operating margin of $112,000, while down from 2003 year-end results, includes significant new investments in 2004.” In addition, CUNA will be dividing $200,000 in spending between the Democratic and Republican conventions “to ensure credit union visibility and influence.” CUNA plans to hold some activities during each of the conventions, according Vice President of Political Affairs Richard Gose, which they expect to announce in early July. During the conventions, CUNA will be promoting its new partnership with the National Child Identification Program and others to help get inkless finger printing kits into the hands of parents. While Gose will be traveling to New York for the Republican convention, CUNA Political Director Karen Kincer will be heading up the effort at the Democratic convention in Boston. “Anytime you have the opportunity to be in front of a large body of political players.if you can get their attention, it makes an impression,” Gose commented. “With the continued support of our affiliated credit unions, combined with the continued growth of the fee-based area, CUNA looks forward to an even more successful year in 2004,” the financial report concluded. [email protected]

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