15. MANAGEMENT SERVICES On May 17, 2010, AWS signed an association management agreement to provide administrative services, office space, facilities and equipment to the Gases and Welding Distributors Association (“GAWDA”), a not-for-profit trade association incorporated in Pennsylvania. Effective January 1, 2015, AWS is no longer providing management services to GAWDA as they are independently managed and have moved into their new premises in Hollywood, Florida. 16. COMMITMENTS AND CONTINGENCIES Operating Leases The Organizations have entered into various operating lease agreements involving equipment. Rent expense for the year ended December 31, 2015 totaled approximately $211,000. Minimum annual payments on the non-cancellable portion of the leases are approximately as follows: For the years ending December 31, 2016 $ 44,000 2017 23,000 Total $ 67,000 Royalty Agreement On October 26, 2005, AWS entered into a Publication Sales Agreement with WEX LLC, whereby WEX LLC was given nonexclusive worldwide rights to duplicate, package, facsimile transmit, price, promote, distribute, sell and/or lease AWS’s documents and technical publications through paper and electronic media formats and compilations. There were several subsequent amendments resulting in higher royalties for AWS. Under the terms of the agreement, AWS earned $2,773,387 during the year ended December 31, 2015. Such amount has been included in revenues in various departments in the Combined Statement of Activities. On July 16, 2015, AWS acquired WEX LLC (NOTE 6). Effective September 4, 2012, AWS amended an existing agreement with The American Society of Mechanical Engineers (“ASME”), whereby ASME has the nonexclusive right to reproduce the 2013 and 2015 editions of the filler metal specifications. ASME will pay AWS royalties equal to 35% of the net sales per quarter for the 2015 edition. Under the terms of this agreement, AWS earned approximately $921,667 during the year ended December 31, 2015. Weldmex Trade Show On January 11, 2013, Weldmex, LLC, now solely owned by AWS, entered into an agreement with Trade Show Consultants (“TSC”) for show management services. TSC services will include developing an annual budget subject to approval by AWS, conducting contract negotiations, overseeing and managing service vendors, general show marketing and promotion, exhibit space selling, contracting and floor layout, customer support and onsite management and logistics. TSC shall be paid a fixed fee of $170,000 annually and incentive fees as follows: (1) 5% of exhibit space revenues and (2) 10% of Fabtech Mexico royalties paid to Weldmex, LLC for up to 30,000 square feet and 15% of Fabtech Mexico royalties paid to Weldmex, LLC for square footage over 30,000 square feet. The agreement is for five annual WELDMEX shows from 2013 through the end of the 2017. Either party may terminate without cause no later than twelve months prior to the commencement of any WELDMEX show and with cause should any party commit a material breach within thirty days of receipt of written notice from the non-breaching party. JUNE 2016 / WELDING JOURNAL 57 AMERICAN WELDING SOCIETY, INC., AND AWS FOUNDATION NOTES TO COMBINED FINANCIAL STATEMENTS DECEMBER 31, 2015
Welding Journal | June 2016
To see the actual publication please follow the link above