NATIONAL BUSINESS AVIATION ASSOCIATION 2004 ANNUAL REPORT

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2004 ANNUAL REPORT NATIONAL BUSINESS AVIATION ASSOCIATION

Table of contents
Chairman’s Message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Year in Review Ensuring Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Providing Leadership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Working Internationally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Building Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Standing Committee Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 NBAA Professional Staff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 NBAA Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Dear NBAA Members,
During the past 18 months, our Association has experienced leadership challenges never thought possible. In late 2002, in anticipation of the end of Jack Olcott’s tenure, a search committee was formed to find his successor and, after six months of delibera-tions, in July of 2003, your NBAA Board elected a new president. As our new president encountered many leadership issues, the Board took on one of its most difficult and important functions – an assessment that this “marriage” was not a good one – and took action. In April of 2004, the Board and our president mutually agreed to part ways. Again, a search committee was formed to identify and recommend to the Board a candidate for president.
On September 7, 2004, Ed Bolen, the former president and CEO of the General Aviation Manufacturers Association (GAMA), began his leadership of NBAA. Our Board is confi-dent that a new and exciting era has begun for NBAA and its Members. Ed brings to NBAA the vision and skills to address the many challenges facing business aviation.
Professional Staff
During the five months before Ed came aboard, I had the opportunity to work as inter-im president and CEO in Washington with our Professional Staff on behalf of the Membership. I was quite surprised to find out what really goes on and how much is actually handled during a “normal” day at NBAA Headquarters. There are many issues surfacing every day that affect our community. Our team often must take action at a moment’s notice to ensure that our goals are achieved and that our community contin-ues to enjoy the freedom to move about the globe. It is remarkable what is accom-plished. The performance and depth of NBAA’s Staff, particularly during challenging times, has been gratifying.

Chairman’s Message

Goals and Objectives
Our Staff and the broader business aviation community have had no shortage of chal-lenges to keep them occupied. In order to stay focused, the Board of Directors provides NBAA’s Standing Committees and Staff with clearly stated strategic goals. Everything we do must be in support of the following, as revised earlier this year:
.
Improve the safety and security of business aviation
.
Create and implement a specific legislative, regulatory and judicial agenda that serves the Membership and the business aviation community
.
Maximize the awareness and acceptance of business aviation
.
Provide products and services that attract and retain Members

These broadly define the work and direction of your Association.
Safety
Of course, safety is by far the most important initiative of the business aviation community. Without a very strong safety culture, the business aviation industry would suffer. Accident rates remain low and we all should be proud of what we have accom-plished. However, the number of incidents (as discussed at the NBAA/FSF Corporate Aviation Safety Seminar last spring) is rising and creating enough disruption that it is having a negative impact on the reliability of the business aviation transportation sys-tem and affecting insurance premiums and coverage. Looking forward, our community must be as diligent in reducing the incident rate as we have been in reducing the acci-dent rate.
Security
Security continues to be one of our most visible issues. The NBAA Secure Access program addresses four key elements:
.
The Transportation Security Administration (TSA) Access Certificate, or TSAAC
.
Access into temporary flight restrictions (TFRs)
.
Access into Ronald Reagan Washington National Airport (DCA)

. A recognized international protocol for business aviation operators
To date, little progress has been made that effectively provides the business aviation community with “security-qualified” access equivalent to that of commercial air carri-ers. NBAA’s initiative of developing the TSAAC program and training flight department personnel in this excellent security protocol is one example how we are working towards a reasonable solution for security-qualified access to TFRs. However, our com-munity continues to be frustrated with the lack of action on the part of the TSA, secu-rity agencies and our elected officials. We will be working to secure the political will and resources to realize the benefits of the Secure Access initiative in the coming year.

Access
Access to airports and airspace is our lifeblood. Business aviation is being challenged on many fronts that include local, state and Federal governments, as well as the communities surrounding airports. Through pressure on many of our elected officials, communities are becoming more creative in restricting access to business aviation. For example, New Jersey’s Teterboro, Wyoming’s Jackson Hole and Denver’s Centennial airports all were impacted by congressional legislation to bypass normal FAA processes. In addition, the FAA and DOT’s latest initiative to address overcrowded conditions at Chicago O’Hare International Airport circumvented input from the business aviation community. O’Hare is even more critical because Chicago has elected to close two air-ports (Meigs Field and Glenview Naval Air Station) that had high potential to relieve both O’Hare and Midway. NBAA will continue to be on the front lines to ensure fair access to our airway and airport system globally.
An additional challenge for access to airports is coming from the commercial air carriers in the form of a claim that business aviation is not paying its fair share in support of the Federal airspace system. In fact, we are. The scheduled carriers also are
(continued)

One place where NBAA shines is the NBAA Annual Meeting & Convention,
the world’s largest purely civil aviation event. In October 2003, NBAA joined the nation in commemorating the 100th anniversary of powered flight with various observations through-out its NBAA 56th Annual Meeting & Convention in Orlando, FL, including a “Countdown to Kitty Hawk” exhibit featuring a Wright Flyer replica (above) and an anniversary-themed Opening General Session featuring aviation leaders as honored guests, such as FAA Administrator Marion C. Blakey (right).
NBAA’s Professional Staff is always available to serve its Membership.
At the NBAA Convention, the Headquarters Booth (below center and right)
is located in the middle of the exhibit floor (below left),
to make Staff more accessible to Attendees.



challenging business aviation initiatives that have no impact whatsoever on commer-cial carriers, such as their opposition to NBAA’s initiative to clarify that the DOT Part 375 citizenship requirements pertain strictly to commercial operators.
Clearly, the commercial air carriers see business aviation as a threat and have chosen to ignore that our Member Companies purchase more than $12 billion in airline tickets annually. One irony of this opposition is that a very substantial percentage of business aviation flights into air carrier airports are dropping off connecting full-fare first- and business-class passengers to facilitate their airline travel to international destinations.

International Influence and Issues
As the Europeans address general and business aviation safety and regulatory issues, decisions made on the eastern side of the Atlantic will have significant impact on our Members operating in Europe and possibly our own regulatory environment in the future. NBAA is participating directly in these deliberations through Staff contributions and through the Association’s membership in the International Business Aviation Council (IBAC) to ensure that unnecessary regulations are not adopted, especially those that directly affect the operations of NBAA Members.
Acceptance of Business Aviation
In order to achieve and maintain a high level of safety, security and access, business aviation must be thought of as a necessary part of our community’s economic growth and well-being. The business aviation industry has done a wonderful job of selling to ourselves, but a less-than-wonderful job of communicating our value to the communi-ties we live and work in, and to some government officials. In order to improve access, the public, the media and the business community need to understand the economic contribution and importance of business aviation. NBAA is beginning to accelerate its programs to tell our story about the positive impact of economic growth, job creation and support for great charities – such as the Corporate Angel Network – through busi-ness aviation. I believe a focused and proactive program for the general public is critical for the success of the business aviation industry.
Once local communities and government officials understand business aviation, moving critical issues through the legislative and regulatory process will be easier and success will come faster. Also, a much better understanding will emerge of how airports are critical to everyone. This will take time, but we must be persistent and use all our grassroots resources to tell this important story.

The Future
We’ve weathered some extraordinary times, but NBAA is strong and continues to be successful in representing the business aviation community – in Washington, DC, at the state and local level, and internationally. We continue to provide expanding operational support for our Members and deal proactively with dozens of operational issues through our 16 Standing Committees and talented Professional Staff.
I have had the unique privilege of working for five months alongside our Staff in Washington, and meeting hundreds of our Members at various Conventions, Seminars and Forums throughout North America, Europe and South America. I have seen many facets of NBAA and I am extremely proud to be the chairman of this great Association, now poised to realize a great future.

Above: Since 2001, NBAA has staffed a GA Desk at the FAA Air Traffic Control System Command Center located in Herndon, VA. In FY 2004, the number of GA Desk Staff members increased to five to further enhance the level of service offered to NBAA Members.
Right and below: In March 2004, NBAA unveiled its Secure Access program in testimony before a field hearing of the House Aviation Subcommittee held at Ronald Reagan Washington National Airport (DCA). One of the goals of NBAA’s Secure Access initiative is to reopen DCA
to security-qualified general aviation aircraft.


Ensuring Access
Founded in 1947, the National Business Aviation Association (NBAA) works tirelessly to serve as the lead-ing voice for more than 7,700 Member Companies that own, operate or support aircraft used as part of growing and sustaining business. In the current climate of pop-up temporary flight restrictions (TFRs), NBAA works closely with government agencies to mitigate the effects of TFRs and other access restrictions on the NBAA Membership. NBAA is committed to providing fair and reasonable access to both our National Airspace System (NAS) and our national system of airports.
NBAA unveiled its Secure Access program in March 2004 during a field hearing of the Aviation Subcommittee of the House Transportation and Infrastructure Committee held at Ronald Reagan Washington National Airport (DCA). As part of its Secure Access initiative, NBAA continues to press the Administration and Congress to implement and fund a reasonable and effective general aviation security program that would grant general avia-tion aircraft access into TFRs and reopen DCA to busi-ness aviation.
In addition, NBAA continues to urge the Transportation Security Administration (TSA) to expand the TSA Access Certificate (TSAAC) Program, which may grant TSAAC holders access to TFRs equivalent to that of the sched-uled air carriers. This “proof of concept” program is currently in place for 24 operators at three airports in New York and New Jersey. NBAA also participated in an industry working group that assisted the TSA in develop-ing Security Guidelines for General Aviation Airports, which were issued by the TSA in May 2004.
To promote security among its Membership, NBAA posts security references on its web site, including its Best Practices for Business Aviation Security; provides Security Protocol Training Seminars nationwide; and offers securi-ty-oriented Informational Sessions at its Conventions and Business Aviation Regional Forums.
The NBAA GA Desk based at the FAA Air Traffic Control System Command Center is another resource for assisting Member operations in the NAS. NBAA originally estab-lished the GA Desk in August 2001 to represent the tac-tical aviation interests of its Member Companies to the ATC System Command Center staff and various ATC facili-ties throughout the United States. The GA Desk’s mission is to afford a voice for equitable representation of busi-ness aviation in the NAS and to ensure equity in air-space allocation for business aviation.
The GA Desk Staff not only represents the interests of NBAA Members in general, as part of their basic Membership dues, but also provides additional services on a subscription basis. In FY 2004, the GA Desk Staff developed and implemented several new and innovative products in support of Members subscribed to the desk and also expanded to five employees to provide more seamless coverage and a more flexible schedule.
Both at the GA Desk and at NBAA Headquarters, Staff members vigilantly monitor the state of the NAS and publish breaking news on TFRs and NOTAMs via both the NBAA web site and the Members-only Airspace Alerts e-mail list, to which more than 2,200 individuals currently subscribe.
NBAA continually represents its Membership before FAA Headquarters and FAA Regional Offices with respect to airport access issues for business aviation and the FAA’s Airport Compliance Program. Over the last year, NBAA worked to address controversial issues at key business aviation airports, including a new discriminatory land-ing-fee structure at Santa Monica Municipal Airport in California, a Stage 2 business jet aircraft ban at Florida’s Naples Airport, Stage 2 restrictions at California’s Van Nuys Airport, attempts to impose an unreasonable and discriminatory mandatory curfew at California’s Bob Hope Airport, and proposed establishment of tall struc-tures near business aviation airports such as New Jersey’s Teterboro.
NBAA carefully monitors the status of these and other general aviation airports and reports on emerging issues via its web site and the weekly NBAA Update.

Above: NBAA Staff members Suzanne Cole and Joe Hart provided service with a smile while managing the EBACE2004 Static Display on Geneva International Airport in May 2004.
Right: NBAA Staff member Mike Nichols provided updates on security and FAA regulatory issues during the NBAA Business Aviation Regional Forum held at Scottsdale Airport, Arizona, in November 2003.
Below: Western Regional Representative Dan Burkhart spoke during the Business Aviation Regional Forum in Scottsdale.

Providing leadership
NBAA is the main advocate on behalf of business avia-tion before Federal, state and local government officials in promoting this industry’s vital role in the nation’s economy. One of the Association’s most valuable resources is its Professional Staff, which works to advance legislation that benefits NBAA Members and to promote Member interests before the FAA, Department of Homeland Security and other government agencies. The more than 50 employees based at NBAA’s Washington Headquarters monitor and engage in operational, regulatory and legislative issues; provide a wide range of Member services and programs; organize and manage domestic and international NBAA events; and produce a variety of publications and online services.
One of NBAA’s top priorities is promoting safey. In 2003 there were no fatal accidents for corporate aviation, making it one of the safest years ever for corporate fly-ing. As an advocate for higher standards of business avi-ation safety, NBAA has been at the forefront of develop-ing guidelines, standards and programs that recognize the specific safety needs of the community.
In order to maintain and enhance operational standards, NBAA and its Standing Committees work diligently to oversee safety and operational issues. NBAA’s Management Guide sets forth best practices and guide-lines for companies operating business aircraft, including annual recurrent training in simulators for flightcrews.
The majority of business aircraft operators voluntarily set higher standards for their crews by returning to recurrent training every six months. NBAA’s Journal of Business Aviation Safety and other publications enhance our community’s excellent safety culture. Scheduled to “go live” by year’s end, NBAA’s Forum for Enhanced Reliability and Maintainability Standards (FERMS) – business aviation’s performance mechanism that will change the way manufacturers build, maintain and support their products in the future – is a high-priority program.
NBAA offers a number of venues – including domestic and international Conventions, Conferences, Regional Forums and Seminars – to promote networking and infor-mation sharing among operators, and to bring operators and vendors together in a productive, mutually beneficial environment.
The NBAA Annual Meeting & Convention, the Association’s flagship event, remains the business avia-tion industry’s largest and most efficient annual gather-ing of buyers and sellers, and offers the largest display of purely civil aviation exhibits in the world. The 2003 Convention drew a total of 28,574 Attendees viewing the products and services of a record 1,068 Exhibiting Companies occupying nearly a million square feet of exhibit space. In addition, 111 aircraft were on Static Display at Orlando Executive Airport and 75 Informational Sessions were offered throughout the week. (See photos on page 4.)
In FY 2004, NBAA’s Business Aviation Regional Forum program grew and gathered momentum. Held several times per year, the Regional Forums bring business air-craft owners, operators, manufacturers, customers and other industry personnel together for a one-day event at some of the best airports and FBOs in the nation. Last year, host locations included Chicago, Scottsdale, AZ, and West Palm Beach, FL. The first international Forum was held in Hong Kong at the end of the fiscal year as a precursor to the Asian exhibition NBAA will debut in 2005. These learning and networking experi-ences are designed to focus on the needs of specific regional business aviation communities.
As another way to communicate with Members on a local level, NBAA currently employs five Staff members who act as representatives for various regions of the United States and are based outside of our Washington Headquarters. These Regional Representatives target state-level issues that affect business aviation; build local, long-term relationships with NBAA Member Companies across the country; and facilitate communica-tions from each region to NBAA Headquarters. They also support local business aviation organizations and work with those groups to address key community issues, such as keeping local general aviation airports open.
Above left: Romano Prodi (third from left), president of the European Commission, was a guest of honor at EBACE2004, May 2004, Geneva, Switzerland.
Above right: NBAA is busy spreading the word about its new Asian Business Aviation Conference & Exhibition (ABACE), which is to debut in August 2005 in Shanghai, China.
Right: NBAA Chairman Donald E. Baldwin (holding scissors on left) joined
Associa..o Brasileira de Avia..o Geral President Anderson Markiewicz and others
in a ribbon-cutting ceremony to open LABACE2004,
April 2004 in S.o Paulo, Brazil.
Below left (from left to right): NBAA Board member Paul Stinebring and NBAA Staff mem-bers Sandy Wirtz and Bill Stine represented NBAA on the LABACE2004 exhibit floor.
Below right: Baldwin (left) joined European Aviation Safety Agency’s Patrick Goudou on a tour of the EBACE2004 Static Display.


Working internationally
As business aviation continues to increase access to global economic markets and population centers, NBAA is at the forefront of international issues, such as an international aviation policy and improvement and stan-dardization of global air traffic systems. NBAA Staff and Standing Committee members routinely participate in international meetings and conferences with organiza-tions such as the new European Aviation Safety Agency. They represent the NBAA Membership in discussions about issues affecting U.S. operators, including harmo-nization of U.S. and European aviation regulations, CNS/ATM, RVSM, certification, maintenance, facilitation and other operational concerns.
NBAA represents its Members’ interests in the interna-tional aviation arena in many ways, including via its annual International Operators Conference, which draws Attendees and presenters from around the world, and its membership in the International Business Aviation Council (IBAC). NBAA is a founding member of IBAC, a non-profit, non-governmental association that repre-sents, promotes and protects the interests of business aviation in international policy and regulatory venues.
NBAA helped develop and actively promotes IBAC’s International Standard for Business Aircraft Operations (IS-BAO), a code of best practices first introduced in 2002 that is designed to help flight departments world-wide achieve the highest levels of safety and profession-alism. This standard, applicable to all business aviation operators, is currently being pursued by hundreds of companies, and NBAA encourages Members to complete this rigorous, yet worthwhile certification process.
In response to Member concerns regarding the opera-tional constraints and economic burdens of the “three trip” monthly frequency requirement necessary for opera-tors to qualify for an international fleet waiver, NBAA met with the Transportation Security Administration sev-eral times to discuss the TSA Waiver program. As a result of NBAA efforts, the TSA suspended the three-trip requirement in May 2004 and there are currently no min-imum trip requirements to obtain a TSA international trip waiver.
Aside from its participation in international regulatory and safety efforts, NBAA’s international presence contin-ues to expand through current and planned events in Europe, Latin America and Asia. At all three venues, the Association provides opportunities for networking, information sharing and vendor and aircraft displays.
In its fourth year, the European Business Aviation Convention & Exhibition (EBACE) drew a record crowd of 6,487 Attendees and featured 247 Exhibitors in Geneva, Switzerland last May. Highlights included the presence of European leaders such as keynote speaker Patrick Goudou, executive director of the European Aviation Safety Agency, and special guest Romano Prodi, president of the European Commission. The visit by the president of the European Commission, the administra-tive and executive body of the European Union, illustrat-ed a strong European interest in business aviation and the importance of the sector for the European air trans-port industry.
The 2nd Annual Latin American Business Aviation Conference & Exhibition (LABACE), held in Sao Paulo, Brazil in April, registered 3,735 people, a 30-percent increase over its debut in 2003. It featured 92 Exhibitors and drew civil aviation authorities from six Latin American countries.
While the Association’s existing international exhibitions in Europe and Latin America grew in size and strength in the spring of 2004, NBAA also furthered its plans for the debut of a new Asian event, to premier in Shanghai in August 2005. Modeled after NBAA’s successful events in the United States, Europe and Latin America, ABACE2005 will be the first major Asian exhibition focused solely on business aviation in Asia, an emerging market with great potential for business aircraft and related products and services.

Above: Then-NBAA Chairman George A. Saling presented a ceremonial check for the Arnold Palmer Hospital for Children & Women to golf legend Arnold Palmer at the close of the NBAA 7th Annual Chairman’s Charity Classic golf tournament, October 2003, Orlando, FL.
Right: The NBAA Certified Aviation Manager (CAM) Governing Board, responsible for all matters pertaining to NBAA’s CAM Program, held its inaugural meeting in June 2004 at NBAA’s Washington, DC, Headquarters.
Below: In June 2004, NBAA Chairman Donald E. Baldwin (right) and National Aviation Hall of Fame Executive Director Mike Jackson met at NBAA Headquarters to sign a Memorandum of Understanding, which stated the intent of each organization to form new alliances and collaborate on activities.


Building community
NBAA is business aviation’s biggest advocate, providing informational and advocacy materials for those who want to learn more about our community, career development opportunities for professionals and even educational programs for teaching children about business aviation. Beyond its educational and professional development initiatives, NBAA works to promote business aviation through charitable works and strengthening ties with other aviation organizations.
NBAA’s web site at www.nbaa.org is the heart of NBAA, providing 24/7 access to the information Members need to manage their operations or find out what’s happening in the business aviation community. The NBAA site attracts nearly 4,000 unique visitors a day and contains more than 44,000 pages, many of which may be accessed by Members only. E-mail is another tool that NBAA has used to great effect. The Association now offers more than 30 topic-oriented Air Mail discussion lists to facilitate information sharing among Members. NBAA Update, the Association’s weekly e-mail newsletter, continues to deliver timely news and announcements to more than 15,500 members of the aviation community each Monday.
Beyond its web site and e-mail offerings, NBAA produces a wide range of advocacy, management and operational publications in both print and online formats to keep
both the business aviation newcomer and experienced  business aviation, the uses of business aircraft and avia-
professional informed.  tion careers. The AvKids Program was honored by being  
NBAA’s Professional Development Program (PDP) – administered in cooperation with the University Aviation  selected as a “Best Bet” on the USA Today Education web site. Downloads of the AvKids Activity Guide and Teacher’s Resource from the AvKids.com web site number  
Association to train future flight department managers –  in the tens of thousands.  
made great strides in FY 2004, adding several new cours-
es and providers. Currently, 18 educational providers  NBAA continued to promote the work of the Corporate  
offer 62 approved PDP Courses, and more than 3,000  Angel Network through notices in NBAA Update and  
PDP Courses have been completed since 1998. PDP  an annual presentation at the NBAA Annual Meeting  13  
participation has several benefits, including preparing  & Convention. Additionally, the 2003 NBAA Chairman’s  
students to participate in the Certified Aviation Manager  Charity Classic Golf Tournament raised a record $65,000  
(CAM) Program, which was created by NBAA to recognize  for the Arnold Palmer Hospital for Children & Women,  
excellence within the field of business aviation and to  an Orlando-based facility dedicated exclusively to the  
raise the quality of management within flight depart- needs of children and women.  
ments.  
In June, NBAA and National Aviation Hall of Fame repre-
NBAA’s CAM Program achieved several firsts this fiscal  sentatives signed an agreement stating the intent of  
year, including the administering of the first two CAM  each organization to form new alliances and collaborate  
Exams and the creation of a CAM Governing Board.  on activities. In the future, NBAA will utilize the Hall  
To date, 26 people have passed the CAM Exam and are  of Fame as a conduit for telling the story of business  
recognized as Certified Aviation Managers. NBAA plans  aviation and for engaging and educating young people  
to offer the CAM Exam at least three times in 2005.  about career opportunities.  
Looking to the future of our community, NBAA continues  
to develop its AvKids Program for elementary-school  
children. The Association released a new children’s book  
titled The Flying Office: Aviation Goes to Work, which is  
designed to teach elementary-school children about  

S
tanding Committee highlights
Made up of committed, talented and knowledgeable volunteers, NBAA’s Standing Committees tackle a variety of operational, technical, legislative and regulatory issues on behalf of the NBAA Membership. Participants either offer immediate solutions or place mat-ters on their agenda for discussion and action. Through the important work of its Standing Committees, NBAA explores the issues and challenges affecting business avia-tion and works to resolve them. This section cites NBAA Standing Committee accomplish-ments for fiscal year 2004.
Airports/Heliports Committee
Addresses business aviation airport issues, including airport access, operations, planning and development issues.
Chair: Cindy Wilson, Altria Corporate Services NBAA Staff Liaison: Jeffrey H. Gilley
.  
Represented the NBAA Membership before the FAA, IBAC and ICAO regarding airport access issues for business aviation, the FAA’s Airport Compliance Program and aircraft noise and emissions issues
.  
Worked to establish community support and reasonable airport access for business aviation, in part by developing a profes-sional CD presentation addressing the value of business aviation airports from local and national perspectives (to be completed in FY 2005)
.  
Supported the NBAA Business Aviation Airport Access Program (BAAAP), a web-based reporting program that publishes

domestic airport access issues on a periodic basis
.  
Urged NBAA’s continued participation with FAA and MITRE Corporation in evaluating a new program designed to investigate applications of enhanced airport-surface markings to improve pilot situational awareness in the runway holding position environment and thereby decrease runway incursions
.  
Addressed controversial issues and actions at key business aviation airports, includ-ing the discriminatory landing-fee struc-ture at Santa Monica Municipal Airport, Stage 2 business jet aircraft ban at Naples Airport, Stage 2 non-addition rule at Van Nuys Airport, proposed mandatory curfew at Bob Hope Airport and proposed estab-lishment of tall structures near Teterboro Airport and other business aviation airports

Airspace/Air Traffic Committee
Represents the interests of business aviation in matters relating to airspace, airspace obstruc-tions, aviation weather, air traffic service and hazards to aviation.
Chair: Carl Fink, Vulcan Materials Vice Chair: Walt Mitchell, Harris Corporation NBAA Staff Liaison: Robert G. Lamond, Jr.
.  Continued representation in the FAA/Industry Collaborative Decision Making process through the efforts of the NBAA GA Desk at the FAA Air Traffic Control System Command Center
.  
Represented NBAA Membership on the RTCA Ad-Hoc Working Committee and its various subgroups, the FAA Administrator’s Joint Planning Office industry develop-ment team and the FAA Air Traffic Procedures Advisory Committee
.  
Continued to monitor and provide input to the conditions for implementation of Domestic Reduced Vertical Separation Minimums (DRVSM) and high-altitude air-space redesign in U.S. airspace

.  
Through the efforts of the FMS/Charting Subcommittee, focused disparate FAA offices on the need to publish terminal approach area procedures to increase safe-ty and developed an industry-wide con-sensus for introducing minimum vectoring altitude information into the electronic flight bag of the future
.  
Through the efforts of the Weather Subcommittee, continued hosting the FAA/Industry Friends & Partners of Weather Aviation Forum


Associate Member Advisory Council
Advises the NBAA Board of Directors on areas of interest to the Associate Membership.
Chair: Roger Whyte, Cessna Aircraft Company Vice Chair: Aaron Hilkemann, Duncan Aviation NBAA Staff Liaison: David W. Almy
.  Contributed to NBAA’s strategic planning and tactical issues identification and man-agement
.  
Revised the Council’s subcommittee struc-ture to emphasize security, people, envi-ronmental, user fees and international issues and renewed efforts to identify the most critical matters within each subject area
.  
Provided ongoing analysis, and targeted deployment, of a study of the user-fee issue and initiated research into the per-sonnel needs of NBAA Member Companies
.  
Continued support for NBAA’s AvKids Program, which last year provided transla-tions of AvKids materials into French, Portuguese, German and Spanish
.  
Contributed to the progress of EBACE, LABACE and the new ABACE

Corporate Aviation Management Committee
Provides advisory materials, management pro-grams and professional development courses for current and aspiring aviation managers in the NBAA Membership.
Chair: Steve Hawkes, BP Vice Chair: Kent Ramquist, USBancorp NBAA Staff Liaison: Robert P. Blouin
.
Oversaw and administered the web-based
NBAA Compensation and Benchmark Survey, which increased Member participa-tion in 2003, drawing 1,080 individuals
.  
Planned and hosted the 2004 Corporate Aviation Management Conference in Anaheim, CA


.  
Reviewed and approved issues related to the NBAA Professional Development Program (PDP), which currently features 18 educational providers, 62 approved PDP Courses and more than 3,000 course com-pletions since 1998
.  
Oversaw the establishment and separation from the Committee of the Certified Aviation Manager (CAM) Governing Board, which held its first meeting in June 2004
.  
Provided ongoing review and updates of the NBAA Management Guide
.  
Provided continuous development of the NBAA Basics initiative targeted at provid-ing management tools and guidance to the Membership
.  
Planned to establish (in FY 2005) a CAMC Scholarship and a university bridging pro-gram to promote and enhance the aware-ness of business aviation among future aviation professionals

FAR Part 135 Committee
Addresses the special requirements and concerns of the segment of NBAA’s Membership that operates under the authority of a commer-cial certificate.
Chair: Dave Hewitt, NetJets Vice Chair: Ray Murphy, American Jet International NBAA Staff Liaison: Michael D. Nichols
.  Participated in revamping the FARs to reflect the realities of operating under FAR Parts 135 or 125 by engaging in various FAA’s Part 135/125 Aviation Rulemaking Committee working groups, which addressed operational, training, airworthi-ness and applicability issues
.  
Sponsored a summit for all NBAA Members to review the Notice of Proposed Rulemaking (NPRM) for Extended Operations (ETOPS) and to provide com-ments in response to the FAA’s request
.  
Met at the FAA Air Traffic Control System Command Center in June 2004 for a regu-lar meeting and tour of the NBAA GA Desk at the Command Center
.  
Held discussions on the special traffic management program and Customs and Border Patrol APIS master crew lists
.  
Educated the Membership on the new fractional rule (Part 91, Subpart K) and associated changes to FAR Part 135

Flight Attendants Committee
Assists corporate flight attendants in their roles as crewmembers aboard corporate aircraft and seeks to improve their safety, efficiency and effectiveness.
Chair: Virginia Lippincott, Pfizer, Inc. Vice Chair: Michael Hesslink, FlightSafety International NBAA Staff Liaison: Joe A. “Jay” Evans
.  Planned and hosted the NBAA 9th Annual Flight Attendants Conference in Anaheim, CA, which was attended by 160 individuals and included security sessions and hands-on catering exercises
.  
Awarded scholarships to 36 flight atten-dants seeking to enhance their careers
.  
Through the Catering Working Group, developed recommended food safety and security guidelines
.  
Promoted training flight attendants to the NBAA minimum standard training listed in the NBAA Management Guide
.  
Worked with various flight attendant training groups to improve and recognize flight attendants who accomplish cabin safety training
.  
Expanded Committee emphasis to include issues related to flight technicians who perform cabin-service duties inflight

Government Affairs Committee
Monitors legislative and political developments and assists the NBAA Staff in achieving the goals of the Association’s legislative and regu-latory agenda.
Chair: Richard Belas, Davis & Harman Vice Chair: Darby Becker, United Technologies Corporation NBAA Staff Liaison: William P. “Pete” West
.  
Focused on advocating for elements of NBAA’s Secure Access initiative
.  
Joined with those from other national aviation associations to support a one-year extension of the bonus-depreciation provision that was incorporated into a major tax measure approved by both the House and the Senate

.  
Endeavored to prevent passage of a change in the treatment of deductibility of expenses associated with business aircraft operations that are part of senior executive compensation and benefit plans
.  
Supported adequate DOT and FAA funding for airports and airways system capacity and basic operational programs
.  
Was challenged to grow and effectively utilize the NBAA Political Action Committee

International Operators Committee
Aids Members in the facilitation of their inter-national flight operations and provides a voice in international aviation affairs through liaison with international organizations.
Chair: Roger Rose, International Pilot
Services, Inc. Vice Chair: Pat Dunn, Motorola NBAA Staff Liaison: William H. Stine
.  
Developed and held the 31st Annual International Operators Conference in Anaheim, CA, which drew more than 450 Attendees and presenters from around the world
.  
Helped develop NBAA’s input to the International Business Aviation Council (IBAC) and contributed participants for International Civil Aviation Organization (ICAO) committees and panels
.  
Worked with other IBAC members to address facilitation issues and the

problems that arise when country regula-tions are not harmonized with ICAO SARPS
.  
Tracked and reported ongoing technical implementations and industry conditions worldwide that affect the equipment and training requirements of operators

.  
Provided NBAA Members with news about international operational, technical and political issues through a web-based feed-back program and NBAA publications
.  
Participated in the updating and refine-ment of the IBAC International Standard for Business Aircraft Operations (IS-BAO)
.  
Administered the NBAA International Operators Scholarship


Local Business Aviation Organization Committee
Facilitates nationwide interaction and commu-nication among various U.S. local business aviation organizations.
Chair: Richard Schuller, Schuller Aerospace Services International
NBAA Staff Liaison: Joseph Ponte & Daniel Burkhart
.  
Restructured Committee organization and introduced a new executive committee
.  
Recognized more than 50 regional busi-ness aviation groups nationwide and maintained communications with their boards and leadership
.  
Utilized a private Air Mail list for local business aviation organization members


Maintenance Committee
Addresses the high-level strategic issues perti-nent to NBAA Member maintenance operations.
Chair: William McBride, Home Depot Vice Chair: Jim Janaitis, IBM NBAA Staff Liaison: Elias Cotti
.  
Planned two NBAA Maintenance Management Workshops for West Palm Beach, FL, and Seattle, WA

.  
Through efforts of the Reliability and Maintainability Programs Subcommittee, continues to support manufacturers in the implementation of reliability-centered maintenance processes within the busi-ness aviation community, such as MSG3 for new aircraft
.  
Participates in NBAA’s Forum for Enhanced Reliability and Maintainability Standards (FERMS), a program for aircraft dispatch reliability and operational availability
.  
Revised the maintenance operations sec-tion of the NBAA Management Guide in light of the new International Standard for Business Aircraft Operations (IS-BAO) and provided NBAA Members with news about maintenance and operations issues through NBAA publications
.  
Participated in World Aviation Safety Conference and Maintenance Review Boards, communicating the U.S. industry’s concerns and positions on proposed changes to certification and operation licensing initiatives
.  
Currently identifying the requirements of OSHA/FAA reports for Environmental

Health and Safety for the aviation mainte-nance environment
.  
Developed a new e-mail newsletter, Quick Turns, to communicate the Committee’s activities and inform maintenance opera-tions of evolving regulatory changes
.  
Administered the Maintenance Management Conference 100 Years of Powered Flight Scholarship

Operations Committee
Assists NBAA Staff with both operational and training issues associated with the needs of pilots, emphasizing human factors in aviation.
Chair: Milt Hobbs, Cablevision Vice Chair: Michael DelMastro, Merck & Co. NBAA Staff Liaison: Eric C. Ramsdell
.  
Hosted an Emerging Technologies Forum and a Training Roundtable at the NBAA 56th Annual Meeting & Convention

.  
Through efforts of the Emerging Technologies Subcommittee, provided briefings to the Membership on enhanced flight-vision systems and runway incursion mitigation technologies
.  
Continued development of the Standards of Excellence for Business Aviation (SEBA)
.  
Collaborated with NBAA’s Flight Attendants, Schedulers & Dispatchers and Maintenance Committees for standards to be used in SEBA
.  
Created resources for vertical lift opera-tions that were posted on NBAA’s web site


Safety Committee
Provides the Membership with advice and guid-ance on all matters relating to the safe opera-tion of aircraft.
Chair: Jeff Sands, Altria Corporate Services Vice Chair: Richard Stofen, BP America, Inc. NBAA Staff Liaison: Eric C. Ramsdell
.  
Administered the NBAA Flying Safety Awards Program
.  
Coordinated development of the Flight Safety Foundation (FSF)/NBAA 49th Annual Corporate Aviation Safety Seminar
.  
Partnered with the FSF in its development of a Flight Operational Quality Assurance program for corporate operators (C-FOQA)
.  
Produced a series of safety recommenda-tions, which were published in NBAA Update and on the NBAA web site
.  
Continued development of training guide-lines for very light jets and made a pres-entation on draft training guidelines for very light jets at EBACE2004 in Geneva
.  
Developed a draft CD training aid based upon the FSF Approach and Landing Reduction/Controlled Flight Into Terrain Toolkit
.  
Initiated the first in a series of videos based on the Committee’s NBAA Aircraft Damage Prevention PowerPoint presenta-tion
.  
Hosted Safety Committee Town Meeting and coordinated an IS-BAO session at the NBAA 56th Annual Meeting & Convention



Schedulers & Dispatchers Committee
Provides input to the Staff on issues associated with scheduling and dispatching corporate air-craft, as well as other issues associated with corporate aviation service personnel.
Chair: Susan Ramsay, Avitat Network-
Worldwide Vice Chair: Kristi Ivey, The Home Depot NBAA Staff Liaison: Joe A. “Jay” Evans
& Joanne Damato
.  
Hosted NBAA 15th Annual Schedulers & Dispatchers Conference in Anaheim, CA with more than 1,400 Attendees
.  
Awarded $30,000 in 2004 Schedulers & Dispatchers Scholarships to eight recipients
.  
Supported professional development and education by administering the NBAA Schedulers Professional Development Program (SPDP), which in 2004 had more than 100 participants
.  
Participated in industry safety and securi-ty initiatives and added additional securi-ty and FAA training segments to the 2004 Schedulers & Dispatchers Conference
.  
Supported the NBAA Dispatch newsletter, which facilitated NBAA communication with schedulers and dispatchers in the business aviation community
.  
Coordinated with 17 regional schedulers and dispatchers groups throughout the United States

Security Council
Provides the Membership with advice and guid-ance on matters relating to business aviation security.
Chair: Douglas Schwartz, AT&T Vice Chair: Beth Haskins, Signature Flight Support NBAA Staff Liaison: Richard J. Doubrava  
.  
Promoted NBAA’s Secure Access initiative and other aviation security and access interests and concerns before the Department of Homeland Security, Transportation Security Administration (TSA), Congress and other Federal agencies and aviation media interests
.  
Partnered with the TSA in further develop-ing the TSA Access Certificate Program (TSAAC), a TSA-recognized “proof of con-cept” project currently in place for 24 operators at New Jersey’s Morristown and Teterboro airports and New York’s Westchester County Airport
.  
Represented the NBAA Membership in the TSA Aviation Security Advisory Committee industry working group, which assisted the TSA in developing the Security Guidelines for General Aviation Airports issued by the TSA in May 2004
.  
Supported NBAA in conducting 25 Security Training for Part 91 Operators Seminars for more than 500 individuals representing over 300 companies across the country to promote a voluntary TSAAC operational security approach for business aviation operators

Tax Committee
Provides guidance to NBAA Staff on taxes affecting business aircraft and how they are affected by Internal Revenue Service rules and Federal Aviation Regulations.
Chair: Alan Goldstein, Citigroup Business Services Vice Chair: Gary Garofalo, Garofalo Goerlich Hainbach P.C. NBAA Staff Liaison: Michael D. Nichols
.  
Addressed opportunities and challenges regarding aviation taxes, financial risk management and regulatory matters and educated the NBAA Membership on such matters via the NBAA Tax, Finance and Insurance web site and NBAA Update newsletter
.  
Led and supported initiatives resulting in the repeal of state sales and use taxes on aircraft or aircraft repairs in two states, thus saving operators significant costs and increasing job opportunities in Rhode Island and Kansas
.  
Provided tax and legal advice to success-fully minimize impacts on business air-craft operators as several efforts by state tax authorities to use corporate aircraft as a source of revenue were defeated in state legislatures
.  
Engaged IRS, DOT and FAA personnel in NBAA’s annual meeting with the regulators in Washington, which educates the regula-tors on business aviation needs and con-cerns while informing NBAA of regulatory perspectives

.  Organized numerous educational seminars to benefit aircraft operators
Technical Committee
Obtains and evaluates data concerning aircraft, engines, aircraft equipment, operations and maintenance problems relative to the business aircraft owner and pilot.
Chair: Dave Abbondanza, General Motors Corporation NBAA Staff Liaison: Elias Cotti
.  
Organized the Maintenance & Operations (M&O) Sessions and hosted an annual Technical Committee Chairs & Vice Chairs Meeting at the NBAA 56th Annual Meeting & Convention
.  
Oversaw the activities of eight Subcommittees, which monitored a variety of ongoing technical issues and imple-mentations affecting business aviation around the world
.  
Participated on the Aging Transport System Rulemaking Advisory Committee’s Harmonization Working Group 13
.  
Participated in EASA/FAA/JAA World Aviation Safety Conference and Maintenance Review Boards, communicat-ing the U.S. industry’s concerns and posi-tions on proposed changes to certification and operation licensing initiatives
.  
Provided NBAA Members with news about Committee activities and technical opera-tions issues and facilitated manufacturer customer-support contacts through NBAA’s web site and publications


R
eport of Independent auditors
The Audit and Finance Committee
National Business Aviation Association, Inc.
We have audited the accompanying statements of the financial position of the National Business Aviation Association, Inc. as of June 30, 2004 and 2003, and the related state-ments of activities and of cash flows for the years then ended. These financial statements are the responsibility of the Association’s management. Our responsibility is to express an opinion on these 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 an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Association’s manage-ment, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the National Business Aviation Association, Inc. at June 30, 2004 and 2003, and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Calibre CPA Group  
Washington, DC  
August 27, 2004  
NATIONAL BUSINESS AVIATION ASSOCIATION, INC.  
FINANCIAL STATEMENTS  
JUNE 30, 2004  

Statements of Financial Position  19  
Statements of Activities  20  
Statements of Cash Flows  22  
Notes to Financial Statements  23  
ASSETS  NATIONAL BUSINESS AVIATION ASSOCIATION, INC. STATEMENTS OF FINANCIAL POSITION JUNE 30, 2004 AND 2003  2004  2003  
CURRENT ASSETS Cash and cash equivalents Accounts receivable Accrued interest receivable Prepaid expenses and other assets Total current assets  $  15,853,858 165,420 21,170 467,950 16,508,398  $  9,283,354 -44,137 1,167,279 10,494,770  
INVESTMENTS IN MARKETABLE SECURITIES FURNITURE AND EQUIPMENT, net of accumulated depreciation of $844,128 and $618,988 LEASEHOLD IMPROVEMENTS, net of accumulated amortization of $314,979 and $275,495  6,991,166 849,452 45,528  11,743,187 606,470 84,387  
Total assets  $  24,394,544  $  22,928,814  
LIABILITIES AND NET ASSETS  
CURRENT LIABILITIES Accounts payable and accrued expenses Amounts held for BASIC Fund Amounts held for Scholarship Fund Deferred revenue Membership dues Annual Meeting Seminars Total current liabilities ACCRUED POSTRETIREMENT BENEFITS COST Total liabilities  $  1,112,783 171,110 80,827 1,482,127 8,063,312 180,283 11,090,442 1,072,709 12,163,151  $  1,228,740 166,020 49,282 1,410,247 8,017,792 49,155 10,921,236 836,050 11,757,286  19  
UNRESTRICTED NET ASSETS Undesignated Board designated Total unrestricted net assets  10,231,393 2,000,000 12,231,393  9,171,528 2,000,000 11,171,528  
Total liabilities and net assets  $  24,394,544  $  22,928,814  
See accompanying notes to financial statements.
NATIONAL BUSINESS AVIATION ASSOCIATION, INC.  
STATEMENTS OF ACTIVITIES  
YEARS ENDED JUNE 30, 2004 AND 2003  
2004  2003  
REVENUE  
Membership dues  $  2,547,537  $  2,386,312  
Seminars  2,000,390  1,583,340  
Annual Meeting & Convention  10,292,576  10,530,720  
Equity in net income of unconsolidated joint ventures  486,781  84,295  
Business Aviation Regional Forum  459,820  436,187  
IS-BAO  69,986  68,520  
Investment income  572,283  512,533  
Publication sales  387,783  288,158  
Sales of merchandise and Travel$ense  54,180  49,387  
Other  593,554  341,139  
Total revenue – forwarded  17,464,890  16,280,591  
EXPENSES  
Program expenses  
Operations services  
General operations services  974,609  857,898  
Manager, technical operations  97,946  -
20  Airports and environment Airspace and ATC  232,614 177,962  202,375 175,244  
Technical services  285,844  294,240  
Flight technology  202,629  214,576  
State and tax issues  127,133  73,952  
Airmen and operational  537,830  456,064  
Total operations services  2,636,567  2,274,349  
Convention and Seminars  
Annual Meeting & Convention  4,476,984  4,235,510  
Seminar programs  1,239,906  1,416,237  
Total Convention and Seminars  5,716,890  5,651,747  
Government and public affairs  
Government affairs  523,960  539,857  
Legislative affairs  215,603  172,222  
Media relations  333,772  317,719  
Total government and public affairs  1,073,335  1,029,798  
Membership services  2,457,444  2,447,196  
Communications and strategic resources  1,155,260  1,440,296  
General Aviation Desk  538,291  357,540  
Asian Business Aviation Conference & Exhibition  17,983  -
International Business Aviation Council  230,251  232,276  
Total program expenses  13,826,021  13,433,202  
General administration and governance  3,028,491  2,611,172  
Total expenses – forwarded  16,854,512  16,044,374  
See accompanying notes to financial statements.  
NATIONAL BUSINESS AVIATION ASSOCIATION, INC.
STATEMENTS OF ACTIVITIES (CONTINUED)
YEARS ENDED JUNE 30, 2004 AND 2003
2004 2003
Total revenue – forwarded $ 17,464,890 $ 16,280,591 Total expenses – forwarded 16,854,512 16,044,374 CHANGE IN NET ASSETS BEFORE NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS 610,378 236,217 NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS 449,487 (241,292) CHANGE IN NET ASSETS 1,059,865 (5,075) UNRESTRICTED NET ASSETS
Beginning of year 11,171,528 11,176,603 End of year $ 12,231,393 $ 11,171,528
See accompanying notes to financial statements.
21  

NATIONAL BUSINESS AVIATION ASSOCIATION, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2004 AND 2003
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES Change in net asset $ 1,059,865 $ (5,075) Adjustments to reconcile change in net assets to net cash provided by operating activities
Depreciation and amortization 265,857 215,667 Net depreciation (appreciation) in fair value of investments (449,487) 241,292 Loss on disposal of equipment 3,036 13,995 Decrease (increase) in assets
Accounts receivable (165,420) -Accrued interest receivable 22,967 453 Prepaid expenses and other assets 699,329 (52,183)
Increase (decrease) in liabilities Accounts payable and accrued expenses (115,957) (282,528) Amounts held for BASIC Fund 5,090 5,003 Amounts held for Scholarship Fund 31,545 30,532 Deferred revenue – Membership dues 71,880 607,565 Deferred revenue – Annual Meeting 45,520 (65,843) Deferred revenue – seminars 131,128 19,380 Accrued postretirement benefits cost 236,659 102,141
22 Net cash provided by operating activities 1,842,012 830,399
CASH FLOWS FROM INVESTING ACTIVITIES Purchases of furniture, equipment and improvements (473,016) (155,056) Purchases of investments (13,282,403) (3,388,629) Proceeds from sales of investments 18,483,911 3,274,374
Net cash provided by (used in) investing activities 4,728,492 (269,311)
INCREASE IN CASH AND CASH EQUIVALENTS 6,570,504 561,088
CASH AND CASH EQUIVALENTS
Beginning of year 9,283,354 8,722,266
End of year $ 15,853,858 $ 9,283,354
SUPPLEMENTAL DISCLOSURE
The Association paid taxes on unrelated business income and lobbying activities during the years ended June 30, 2004 and 2003, which totaled $25,601 and $28,082, respectively.
See accompanying notes to financial statements.
NATIONAL BUSINESS AVIATION ASSOCIATION, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004 AND 2003
NOTE 1. ORGANIZATION
National Business Aviation Association, Inc. (the Association) is a business association of organizations that own or operate aircraft in the conduct of their business or pro-vide services to the owners of business aircraft. The Association was organized in 1947 for the purpose of furthering the cause of safety and economy of business aircraft oper-ators. The Association has been granted an exemption from Federal income taxes under the provisions of Section 501(c)(6) of the Internal Revenue Code, except for the proxy tax on lobbying activities and taxes on the net income from unrelated business activi-ties.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Method of Accounting – The accompanying financial statements were prepared using the accrual basis of accounting.
Financial Statement Format – The Association classifies its net assets into three class-es: unrestricted, temporarily restricted and permanently restricted. The Association has no permanently or temporarily restricted net assets.
Cash Equivalents – Cash equivalents include highly liquid investments purchased with original maturity dates of ninety days or less.
Investments – Investments in marketable securities are stated at fair value that repre-sents publicly quoted market prices.
Furniture, Equipment and Improvements – Furniture, equipment and improvements are carried at cost less accumulated depreciation and amortization. Major additions are capitalized while replacements, maintenance and repairs that do not improve or extend the lives of respective assets are expensed. Depreciation and amortization of furniture, equipment and improvements are computed over the estimated useful lives of the respective assets using the straight-line method. Total depreciation and amortization expenses were $265,857 and $215,667 for the years ended June 30, 2004 and 2003, respectively.
Unrestricted Net Assets – Unrestricted net assets are available for the overall opera-tions of the Association and include both designated and undesignated resources. Unrestricted net assets include the following board designated funds:
Contingency Fund – Anticipated uses of the contingency fund are special projects
that must be approved in advance by the Board of Directors. Unrestricted net
assets designated for this fund totaled $1,000,000 at June 30, 2004 and 2003.
Permanent Capital Fund – The permanent capital fund is to be used as a reserve
against economic uncertainty. Unrestricted net assets designated for this fund
totaled $1,000,000 at June 30, 2004 and 2003.
Membership Dues – The Association records Members’ dues, which are based on each Member’s involvement with business aviation, as revenue on a monthly pro rata basis during their Membership year.
Annual Meeting & Convention – Advance receipts and disbursements relating to the Association’s Annual Meeting & Convention are deferred and recorded as revenue or expenses in the fiscal year in which the Annual Meeting & Convention is conducted.
Travel$ense Software – Research and development costs to establish the technological feasibility of the computer software are expensed as incurred. Costs of producing the product masters between the date of technological feasibility and the date the software is released to customers are capitalized. The capitalized software is amortized on the straight-line basis over the remaining economic life of the software beginning when the product is released to customers. Reproductions of the computer software and material costs are capitalized as inventory and charged to program expense when rev-enue from the sale of the software is recognized. Inventory is stated at the lower of cost or fair value.
Concentrations of Credit Risk – The Association’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash equivalents and investments. The Association’s cash equivalents and investments are in high quality securities placed with major banks and financial institutions. Management continually monitors its positions with, and credit quality of, the financial institutions with which it places its financial instruments. At June 30, 2004, the Association’s cash balances exceeded the FDIC insured limits by approximately $6,800,000. In addition, the Association has approximately $9,391,000 in money market accounts backed by U.S. Government securities that are not insured.
Use of Estimates – The preparation of financial statements in conformity with general-ly accepted accounting principles requires management to make estimates and assump-tions that affect the reported amounts of assets and liabilities at the date of the finan-cial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 3. INVESTMENTS IN MARKETABLE SECURITIES
Investments in marketable securities are composed of the following at June 30:
2004 2003 Cost Market Cost Market
Mutual funds $ 1,540,000 $ 1,551,159 $ 3,674,356 $ 3,731,910 Corporate bonds 922,534 936,507 2,099,772 2,385,924 Corporate stocks 4,406,467 4,503,500 5,591,627 5,625,353
$ 6,869,001 $ 6,991,166 $ 11,365,755 $ 11,743,187
Realized net gains (losses) on investments during the years ended June 30, 2004 and
2003, totaled $704,754 and $(1,286,584), respectively.
NOTE 4. RETIREMENT PLANS
During the year ended June 30, 1998, the Association established the National Business Aviation Association, Inc. 401(k) Profit Sharing Plan and Trust for all eligible employees. All plan participants have the option of deferring up to 15 percent of their annual salary, subject to certain IRS limitations. The Association may match a portion of the salary deferred by each employee. For the years ended June 30, 2004 and 2003, the Association contributed $433,091 and $380,769, respectively.
NOTE 5. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
24  The Association provides health care benefits to certain retired employees. Active employees become eligible for benefits after meeting certain age and service require-ments. The plan is contributory for employees under the age of 62, non-contributory for employees who have reached the age of 62, and contains other cost-sharing fea-tures such as deductibles. A summary of the actuarial evaluation for this plan including the funded status and the accrued benefit cost at June 30, and the net periodic bene-fit cost included in the accompanying statements of activities for the years ended June 30, 2004 and 2003, follows:
2004 2003
Benefit obligation at June 30 $ 1,661,182 $ 1,404,232 Fair value of plan assets at June 30 --Funded status $ (1,661,182) $ (1,404,232) Accrued postretirement benefits cost
at beginning of year $ 846,414 $ 733,909 Net periodic benefit costs recognized in the
consolidated statements of activities 273,988 138,126 Benefits paid by the Association (47,693) (25,621) Accrued postretirement benefits cost at June 30 $ 1,072,709 $ 846,414 Weighted average assumption for discount rate
as of June 30  6.00% 5.75%
The health care cost trend rate assumption has a significant effect on the amounts reported in the accompanying financial statements. For the 2004 valuation, the health care cost trend rate assumption was 9 percent for 2004 decreasing to 5 percent by 2008. If the assumed rates increased by one percentage point in each year, it would increase the benefit obligation as of June 30, 2004, by $299,922.
NOTE 6. TRAVEL$ENSE SOFTWARE
Travel$ense is a business travel productivity tracking software program developed by the Association to be marketed and sold to organizations that own or operate business aircraft. At June 30, 2004 and 2003, there were no unamortized capitalized costs asso-ciated with Version Three. During the years ended June 30, 2004 and 2003, there was no amortization expense related to Travel$ense. Product enhancement costs for Version Three charged to expense during the years ended June 30, 2004 and 2003, totaled $32,865 and $60,218, respectively.
NOTE 7. LEASE COMMITMENTS
The Association leases its administrative office space in Washington, DC and certain office equipment under agreements expiring at various times through 2008. Future min-imum annual rental payments required for fiscal years under these operating leases are:
2005 2006 2007 2008  $ 473,670 84,459 7,228 1,079  
Total  $ 566,436  
Total expenses related to leases were approximately $506,748 and $534,615 in 2004 and 2003, respectively.
NOTE 8. RELATED PARTIES
The Association is a member of the International Business Aviation Council (IBAC) along with 10 other aviation member groups. Administrative, overhead and direct costs are borne by IBAC member groups, including the Association.
The National Business Aviation Association, Inc. Political Action Committee is a non-profit political association that was registered with the Federal Election Commission on June 17, 1996. Administrative, overhead and direct cost borne by the Association dur-ing the years ended June 30, 2004 and 2003, were immaterial.
The Association provides administrative support to the BASIC Fund, which is a tax exempt organization, under Internal Revenue Code section 501(c)(3). The BASIC Fund was organized to provide educational and historical programs related to business avia-tion. Total assets maintained by the Association for the BASIC Fund were $171,110 and $166,020 at June 30, 2004 and 2003, respectively. No contributions were made by the Association to the BASIC Fund during the years ended June 30, 2004 and 2003; however, during the years ended June 30, 2004 and 2003, the Association received $5,090 and $5,003, respectively, in contributions on behalf of the BASIC Fund and made no disbursements from the assets held on behalf of the BASIC Fund.
NOTE 9. JOINT VENTURES
Joint ventures owned between 20 and 50 percent by the Association where the Association is able to exercise significant influence are accounted for by the equity method.
The Association created EBACE, LLC, a partnership in which NBAA has a 50-percent ownership interest and is the general partner. EBACE was created to address the issues of European-based operators, U.S. operators flying to Europe and non-operators that can benefit from the use of aircraft.
The Association created a second joint venture with a 50-percent ownership interest called LABACE. The purpose of this joint venture is to address the issues of Latin American-based operators.
The equity in net income of unconsolidated joint ventures reported in the accompany-ing statements of activities consists of the Association’s share of the revenue and expenses of these two joint ventures as follows: Since the joint ventures retain no assets, no investment in unconsolidated joint ventures is reported in the accompanying statements of financial position.
Year Ended June 30, 2004 Revenue Expenses  EBACE $ 2,202,841 (1,735,159)  $  LABACE 400,970 (381,871)  Total $ 2,603,811 (2,117,030)  
Net  $ 467,682  $  19,099  $ 486,781  
Year Ended June 30, 2003 Revenue Expenses  $ 1,857,419 (1,727,543)  $  371,880 (417,461)  $ 2,229,299 (2,145,004)  
Net  $ 129,876  $  (45,581)  $ 84,295  


Office of the
President/CEO

Edward M. Bolen
President and Chief Executive Officer
Marie Wilkins
Executive Assistant

Conventions & Seminars
Suzanne P. Cole
Senior Manager, Regional Forums & Static Displays
Dina Green
Senior Manager, Seminars
Deborah A. Hanson
Senior Manager, Housing & Special Events
Linda A. Peters
Director, Exhibits
Lydia V. Sampson
Assistant Manager, Registration
Andrew Schweickert
Manager, Exhibits & Static Displays
Martina A. Smith
Senior Manager, Exhibit Services
Saundra K. Wirtz
Director, Seminars
Professional Staff
Finance
Chris Casselman
Controller
Melanie Brown
Assistant Manager to Controller
Government & Public Affairs
Douglas Carr
Director, Government Affairs; Corporate Secretary
Alex A. Rushton
Special Projects Coordinator
Membership, Marketing & Regional Programs
Joseph Ponte
Vice President, Membership, Marketing & Regional Programs
John O. Balsiger
Midwest Regional Representative
David P. Bascomb
Manager, Membership Records & Services
Daniel W. Burkhart
Director, Regional Programs; Western Regional Representative
June DeFontes
Assistant Manager, Membership Records & Services
Harry Houckes
Southeast Regional Representative
Susan G. Kaplan
Senior Manager, Membership Records & Services
Dean R. Saucier
Northeast Regional Representative
Benjamin A. Schwalen
Assistant Manager, Records & Programs
Paul H. Smith
Southwest Regional Representative
Operations
Steven J. Brown
Senior Vice President, Operations (as of October 4, 2004)
Sue Ashley
Specialist, GA Desk at the FAA Air Traffic Control System Command Center
Elias Cotti
Director, Technical Operations
Joanne Damato
Manager, GA Desk at the FAA Air Traffic Control System Command Center
Robert V. Damato
Operations Service Group
Sarah E. Dicke
Assistant to the Senior Vice President, Operations
Richard Doubrava
Director, Security
Jeff Evans
Assistant Manager, GA Desk at the FAA Air Traffic Control System Command Center
Joe A. Evans
Director, Operations
Jeffrey H. Gilley
Manager, Airports & Ground Infrastructure
Joseph Hart
Manager, Operations Service Group
Mark Larsen
Operations Service Group
Robert G. Lamond Jr.
Director, Air Traffic Services & Infrastructure
Michael D. Nichols
Manager, Tax &
Eric C. Ramsdell
Manager, Safety & Operations
Ernest E. Stellings
Specialist, GA Desk at the FAA Air Traffic Control System Command Center
William H. Stine II
Director, International Operations
J. Daniel Wauhop
Specialist, GA Desk at the FAA Air Traffic Control System Command Center
Strategic Programs

Amy M. Freed
Managing Editor
Don Lasko
Manager, Information Systems
Quang X. Nguyen
Web Programmer
Lisa A. Paitz Spindler
Web Site Designer
Jason E. Wolf
Webmaster
Ashley C. L. Yang
Art Director
Support Services
Shirley Rose
Senior Support Services Assistant
Cheri Rudd
Manager, Office Coordination
Brenda Smith
Support Services Assistant
James E. Williams
Mailroom Coordination & Inventory Control
Finance
As of September 2004, except where noted
B
oard of directors











As of September 2004
. 2004 National Business Aviation Association, Inc.
1200 Eighteenth Street NW . Suite 400 . Washington, DC 20036-2527
Tel: (202) 783-9000 . Fax: (202) 331-7968
Web: www.nbaa.org