2013-10-21T13:15:09-05:00 2012-12-31 540975470 HOMES LOWRY HORN & JOHNSON LTD 3998 FAIR RIDGE DRIVE SUITE 360 FAIRFAX VA 220332907 990 2012-01-01 530213841 ARMY AND AIR FORCE MUTUAL AID ASSOCIATION ARMY 7035223060 102 SHERIDAN AVENUE FORT MYER VA 22211 WALTER R LINCOLN 7035223060 2013-07-23 1 GAIL E CHAMBERS P00631932 7032814880 2012 2016-02-24 21:20:13Z WALTER R LINCOLN 102 SHERIDAN AVENUE FORT MYER VA 22211 188365194 0 X WWW.AAFMAA.COM X 1879 VA THE ORGANIZATION'S PRIMARY EXEMPT PURPOSE IS TO AID ITS MEMBERS AND FAMILIES IN A PROMPT, SIMPLE AND SUBSTANTIAL MANNER. 17 16 75 0 0 0 0 0 45593683 50131973 52985695 52587528 914317 1611478 99493695 104330979 0 0 57801666 51879813 6040161 6311287 0 0 0 34602005 42691536 98443832 100882636 1049863 3448343 978611437 1036156814 44675274 58382765 933936163 977774049 X AAFMAA'S MISSION IS TO BE THE PREMIER PROVIDER OF INSURANCE, FINANCIAL AND SURVIVOR SERVICES TO THE AMERICAN ARMED FORCES COMMUNITY. 1 0 THE ORGANIZATION OPERATES SOLELY FOR THE MUTUAL BENEFIT OF ITS MEMBERS, THEIR FAMILIES AND BENEFICIARIES. IT PROVIDES LOW COST, INTEREST SENSITIVE AND TERM LIFE INSURANCE PROTECTION TO ITS APPROXIMATELY 90,000 MEMBERS. THE ORGANIZATION PROVIDES A FINANCIAL AWARENESS PROGRAM, INCOME PROTECTION, INSURANCE COUNSELING, AND ASSISTANCE IN APPLYING FOR ENTITLEMENT BENEFITS TO A LARGE PORTION OF ITS MEMBERSHIP. THE ORGANIZATION PROVIDES FINANCIAL PLANNING, INVESTMENT MANAGEMENT SERVICES, AND TRUST SERVICES TO ITS MEMBERS. 0 0 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 1 0 0 0 1 1082 0 75 1 0 0 0 0 0 0 X 17 16 0 0 0 0 1 1 1 1 1 0 0 0 1 1 1 1 1 1 0 0 X ASSOCIATION 7035223060 102 SHERIDAN AVENUE FORT MYER VA 22211 LTG DONALD M BABERS 2.00 X 0 0 0 GEN JACK N MERRITT 2.00 X 0 0 0 MAJ WALTER R LINCOLN 40.00 X X 378564 0 38974 BG MACK C HILL 2.00 X 0 0 0 MG ROBERT L SMOLEN 2.00 X 0 0 0 COL JAMES P GERSTENLAUER 2.00 X 0 0 0 GEN JOHN A SHAUD 2.00 X 0 0 0 MG DONALD W SHEPPERD 2.00 X 0 0 0 COL ELISABETH J STRINES 2.00 X 0 0 0 LTC GEORGE T GREILING 2.00 X 0 0 0 LTG JOSEPH DEFRANCISCO 2.00 X 0 0 0 CSM GEORGE HORVATH 2.00 X 0 0 0 CMSGT LEWIS E MONROE 2.00 X 0 0 0 COL DENNIS D PORTER 2.00 X 0 0 0 CMSGT JOHN T RIDGE 2.00 X 0 0 0 LTG WILLIAM J LENNOX 2.00 X 0 0 0 COL WILSON A BUD SHATZER JR 2.00 X 0 0 0 TOM E HARGIS 35.00 X 132868 0 33296 BRADY M GRULER 35.00 X 142778 0 33772 JAMES M MALLEY 40.00 X 344266 0 32235 LISA G MILMAN 35.00 X 134051 0 34547 GARY N AIKEN 35.00 X 115742 0 26200 A E LYNE BABIN 40.00 X 135461 0 7454 KATHIE H BALLARD 35.00 X 101801 0 29674 CLIFTON E BROWN 35.00 X 103208 0 13051 1588739 0 249203 9 0 1 0 C-VIEW CORP 2506 E MEREDITH DR VIENNA VA 22181 MARKETING CONSULTANT 1060484 WOMBLE CARLYLE SANDRIDGE RICE 1200 NINETEENTH ST NW SUITE 500 WASHINGTON DC 20036 LEGAL SERVICES 635918 2 PREMIUM REVENUE 524113 47602595 47602595 AFA MEMBER SERVICE INCOME 524113 2461593 2461593 MEMBERSHIP FEES FOR SERVICES 524113 67785 67785 50131973 52862129 52862129 1242285 1132876 109409 109409 109409 82626738 82901339 -274601 -274601 -274601 CONSIDERATION FOR SUPPLEMENTAL CO 524113 1051039 1051039 NET RECOVERIES OF IMPAIRED SECURI 524113 398760 398760 LOAN FEES 524113 41000 41000 11270 11270 1502069 104330979 104330979 0 0 51879813 1738703 3249996 357198 621181 344209 405968 182215 171266 1387223 96784 2390995 577588 10734 181840 1526184 167156 CHANGE IN RESERVES 20918342 EXCESS INTEREST CREDIT 8661215 INVESTMENT EXPENSE 3027744 BAD-DEBT ON LOANS, POLI 1744037 1242245 100882636 X 7167555 10019079 43246793 43440870 54465 566698 291783 95735 26112521 3177363 22513750 22935158 728640713 745288338 166437519 204311808 8561 7300 10250298 9491828 978611437 1036156814 2303433 2831189 2662058 2405096 39709783 53146480 44675274 58382765 X 0 0 0 0 933936163 977774049 933936163 977774049 978611437 1036156814 X 3448343 40389543 X 0 1 X 1 0 15574162 15574162 5718477 1436629 4281848 3770715 1156493 2614222 1049167 584241 464926 22935158 POLICY LOANS 59079762 C MORTGAGE LOANS INVESTMENT 145232046 C 204311808 DEATH BENEFITS PAYABLE 16863365 SETTLEMENT OPTIONS PAYABLE 20541740 PAYABLE FOR SECURITIES 15718241 TENANT SECURITY DEPOSITS 23134 53146480 X 95804865 1132876 1132876 94671989 9658990 9658990 104330979 92356522 1132876 1132876 91223646 9658990 9658990 100882636 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: ALTHOUGH THE ASSOCIATION IS TAX EXEMPT, IT STILL EVALUATES UNCERTAINTY IN INCOME TAX POSITIONS BASED ON A "MORE-LIKELY-THAN-NOT" RECOGNITION STANDARD. IF THAT THRESHOLD IS MET, THE TAX POSITION IS THEN MEASURED AT THE LARGEST AMOUNT THAT IS GREATER THAN 50% LIKELY OF BEING REALIZED UPON ULTIMATE SETTLEMENT. AS OF DECEMBER 31, 2012, THE ASSOCIATION HAS EVALUATED ITS MATERIAL TAX POSITIONS AND DETERMINED THAT NO ACCRUALS FOR UNCERTAIN TAX POSITIONS ARE REQUIRED ON THE ASSOCIATION'S FINANCIAL STATEMENTS. RETURNS FILED FOR TAX PERIODS ENDING AFTER DECEMBER 31, 2008, ARE OPEN TO EXAMINATION AND ANY CHANGES BY THE TAXING AUTHORITIES MAY AFFECT THE ASSOCIATION'S INCOME TAX LIABILITY. PART XI, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES 1,132,876. PART XI, LINE 4B - OTHER ADJUSTMENTS: NET ADJUSTMENT FOR SUBSIDIARY INCOME AND EXPENSES 3,641,267. INVESTMENT EXPENSES 6,017,723. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES 1,132,876. PART XII, LINE 4B - OTHER ADJUSTMENTS: NET ADJUSTMENT FOR SUBSIDIARY INCOME AND EXPENSES 3,641,267. INVESTMENT EXPENSES 6,017,723. X X 0 0 0 MAJ WALTER R LINCOLN 333564 0 45000 0 0 0 25000 0 13974 0 417538 0 0 0 TOM E HARGIS 127868 0 5000 0 0 0 13921 0 19375 0 166164 0 0 0 BRADY M GRULER 135128 0 7650 0 0 0 14865 0 18907 0 176550 0 0 0 JAMES M MALLEY 194266 0 150000 0 0 0 11250 0 20985 0 376501 0 0 0 LISA G MILMAN 130401 0 3650 0 0 0 14185 0 20362 0 168598 0 0 0 NEW PROGRAM SERVICES FORM 990, PART III, LINE 2 AAFMAA WEALTH MANAGEMENT & TRUST FORM 990, PART VI, SECTION A, LINE 6 THE ORGANIZATION HAS MEMBERS. FORM 990, PART VI, SECTION A, LINE 7A THE AAFMAA CONSTITUTION SPECIFIES THAT THE MEMBERS OF THE BOARD OF DIRECTORS ARE ELECTED FROM AND BY THE MEMBERS OF THE ASSOCIATION AT THE ANNUAL MEETING, EACH OF WHOM ARE ELECTED FOR FOUR-YEAR TERMS (WITH ROUGHLY ONE-FOURTH OF THE DIRECTORS BEING ELECTED EACH YEAR). BETWEEN ANNUAL MEETINGS, THE AAFMAA CONSTITUTION SPECIFIES THAT ANY VACANCY MAY BE FILLED BY A MAJORITY VOTE OF THE BOARD. ANY PERSON SO APPOINTED BY THE BOARD WOULD ONLY SERVE UNTIL THE NEXT ANNUAL MEETING, UNLESS HE OR SHE IS ELECTED BY THE MEMBERS AT THAT MEETING. IN PRACTICE, SUGGESTIONS FOR MEMBERS OF THE BOARD CAN COME FROM ANY MEMBER. THEY ARE CONSIDERED BY A NOMINATING COMMITTEE, CONSISTING OF MEMBERS, WHO WOULD THEN NOMINATE PERSONS TO BE VOTED UPON BY THE ENTIRE MEMBERSHIP AT THE ANNUAL MEETING (OR BY PROXY). FORM 990, PART VI, SECTION A, LINE 7B THE AAFMAA CONSTITUTION SPECIFIES THAT THE AFFAIRS OF THE ASSOCIATION SHALL BE MANAGED BY A BOARD OF ELEVEN OR MORE DIRECTORS, WHICH MEETS REGULARLY BOTH AS A BOARD IN ITS ENTIRETY AND IN SPECIFIC COMMITTEES, CURRENTLY THE MEMBERSHIP AND FINANCE COMMITTEES. THOSE COMMITTEES AND THE BOARD AS A WHOLE RECEIVES REPORTS AND MAKES DECISIONS ON BEHALF OF THE MEMBERS. THESE REPORTS AND DECISIONS ARE CONTEMPORANEOUSLY DOCUMENTED BY BOTH THE BOARD OF DIRECTORS AND THE COMMITTEES. DUTIES AND POWERS OF THE BOARD OF DIRECTORS AND COMMITTEES ARE SPECIFIED IN THE CONSTITUTION. THE AAFMAA CONSTITUTION CAN ONLY BE ALTERED OR AMENDED BY A TWO-THIRDS VOTE OF THE MEMBERS PRESENT OR PROPERLY REPRESENTED BY PROXY. SO MEMBERS APPROVE ANY DECISION OF THE ORGANIZATION THAT WOULD CONSTITUTE A CHANGE TO THE CONSTITUTION AND IT DELEGATES OVERSIGHT AUTHORITY FOR OTHER DECISIONS TO THE BOARD, WHICH IS ELECTED BY THE MEMBERS. FORM 990, PART VI, SECTION B, LINE 11 THE AAFMAA CONTROLLER, ASSISTANT TO THE PRESIDENT, AND THE PRESIDENT REVIEW THE FORM 990 BEFORE IT IS FILED. FORM 990, PART VI, SECTION B, LINE 12C AAFMAA MAINTAINS A CONFLICT OF INTEREST STANDARD AND POLICY FOR DIRECTORS, CONSISTENT WITH THE VIRGINIA NONSTOCK CORPORATION ACT. TO RETAIN THEIR LIABILITY PROTECTION AND INDEMNIFICATION, DIRECTORS MAY NOT PARTICIPATE IN A "CONFLICT OF INTEREST TRANSACTION" AS A "NON-DISINTERESTED DIRECTOR". ANY DIRECTOR WHO BECOMES NON-DISINTERESTED MUST ADVISE THE OTHER DIRECTORS THAT HE OR SHE IS NON-DISINTERESTED WITH RESPECT TO THE APPLICABLE MATTER AND RECUSE HIMSELF OR HERSELF FROM VOTING IN ANY BOARD OR COMMITTEE MEETING ON ANY ACTION REGARDING AAFMAA AND THE APPLICABLE MATTER. THIS POLICY IS PROVIDED TO DIRECTORS AT EVERY JUNE BOARD MEETING THROUGH A MEMORANDUM FROM AAFMAA'S GENERAL COUNSEL. WITHIN THE MEMORANDUM THE GENERAL COUNSEL PROVIDES SPECIFIC GUIDANCE ON THE POLICY SO THAT DIRECTORS CAN RELY ON IT AS LEGAL ADVICE. FORM 990, PART VI, SECTION B, LINE 15A AAFMAA RETAINED AN INDEPENDENT COMPENSATION CONSULTANT TO REVIEW THE COMPENSATION OF THE PRESIDENT AND TREASURER AND COMPARE IT TO COMPENSATION SURVEY DATA FROM PARALLEL POSITIONS IN OTHER SIMILAR SIZE ASSOCIATIONS. THE PRESIDENT AND TREASURER'S SALARY FOLLOWS A METHOD ESTABLISHED SPECIFICALLY FOR THIS POSITION. IT IS REVIEWED AND APPROVED ANNUALLY BY THE CHAIRMAN OF THE BOARD. FOR ALL OTHER EMPLOYEES, THE PROCESS INCLUDES ANNUAL, WRITTEN REVIEWS AND PAY INCREASES DEPENDING UPON PERFORMANCE APPRAISALS. PAY INCREASES ARE WITHIN RANGES INITIALLY ESTABLISHED BY EXTERNAL COMPENSATION CONSULTANTS. RANGES ARE UPDATED ANNUALLY FOR INFLATION BUT NOT ANNUALLY FOR COMPARABILITY. RATINGS ARE COMPLETED CONTEMPORANEOUSLY AND FILED IN INDIVIDUAL PERSONNEL RECORDS. THIS PROCESS APPLIES TO ALL, NOT JUST OFFICERS OR KEY EMPLOYEES. FORM 990, PART VI, SECTION C, LINE 19 A COPY OF THE CONSTITUTION IS GIVEN TO EACH MEMBER WHEN HE/SHE JOINS THE ASSOCIATION. ANNUAL REPORT INCLUDING AUDITED FINANCIAL INFORMATION IS SENT TO EACH MEMBER EACH YEAR. THE IRS FORM 990 IS PROVIDED TO THE PUBLIC UPON REQUEST IN ACCORDANCE WITH THE 1996 TAXPAYERS BILL OF RIGHTS. ADJUSTMENT TO BEGINNING BALANCE SHEET FORM 990, PART X, BALANCE SHEET THE BEGINNING BALANCE SHEET WAS RESTATED TO REMOVE THE INVESTMENT IN DISREGARDED ENTITIES. THE ASSETS AND LIABILITIES OF THESE ENTITIES ARE ALREADY INCLUDED IN THE CONSOLIDATED BALANCE SHEET REPORTED ON THIS FORM 990. LINE 12: INVESTMENTS-OTHER SEC. AS PREVIOUSLY REPORTED $ 188,392,908 LESS: INVESTMENT IN DISREGARDED ENTITIES (21,955,389) LINE 12: INVESTMENTS-OTHER SEC. AS ADJUSTED $ 166,437,519 LINE 32: RETAINED EARNINGS AS PREVIOUSLY REPORTED $ 955,891,552 LESS: INVESTMENT IN DISREGARDED ENTITIES (21,955,389) LINE 32: RETAINED EARNINGS AS ADJUSTED $ 933,936,163 CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 9: INSURANCE & OTHER RESERVES INCREASES 19,662,665. INTEREST MAINTENANCE RESERVE INCREASE 4,030,449. CHANGE IN UNREALIZED DEPRECIATION OF EQUITY SECURITIES 17,359,119. INCREASE IN NON-ADMITTED ASSETS -751,692. INCREASE IN TREASURY INFLATION-PROTECTED SECURITIES (TIPS) 89,002. 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