USA Board of Directors Meeting Columbus, Ohio July 1, 2013

CEO Report

1. Key Success Factors

Finance. This year through budget cuts, better management oversight and procedures, the organization is on track to meet our projected $840,000 positive net income. If achieved, this will be the highest net income that USA Fencing has ever met. We have paid down our current and long term liabilities at an impressive rate. Specifically, since the beginning of this fiscal year we have paid down on our accounts payable by $958,000. Cash Flow has been carefully monitored and we have successfully worked through our low cash periods. Credit terms are now being extended to us which is a crucial part of managing cash flow. This is not only a huge improvement from 2012, but will provide a good reference for us next season. As of June, none of the $250,000 line of credit provided to us by the USFF has been accessed.

Development. USA Fencing has completed two giving campaigns this year. Life members and past donors received a personalized letter at the end of year highlighting our successes and plans for 2013-14. To wrap up the 2012-13 season, an electronic appeal will be sent out to all members in conjunction with an ad in the Summer Nationals program. General donation revenue is up over 2011-12 by 53% reflecting an increase in over $12,000. A formal development plan was created for diversifying and increasing annual giving revenues. The organization is also applying for grant funding outside of the USOC grant opportunities and will continue to seek out other foundation opportunities.

Partners & Sponsors. USA Fencing continues to work to bring in additional streams of revenue by working with our partners and sponsors. We have been able to build new partnerships and expand existing relationships to bring in funds that have directly impacted our operations. During the 2012-13 season we will have received $1,107,570 in revenue and in kind benefits from our marketing partners, suppliers, sponsors, grants and donations (excluding the USOC base funding). Of this, $329K was from new sources of funding…increasing value in kind funding by 40% and cash by 49%. These increases in revenue and in kind benefits of 42% are above industry average increases. We see this as an incredible achievement and a successful start to increasing our revenues. All numbers are reflective of the information available as of June 21, 2013.

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Membership. The addition of the individual membership requirement for Member Clubs resulted in a 63 % increase in overall membership (as of June 21, 2013) reflecting a growth of 13,221 members and an increase in revenue of over $93,000 (8% increase in revenue). The increase is largely attributed to the new non-competitive membership. We also addressed trial lesson concerns by creating an easy way to report and document the individuals who participate in one-time lessons. Club membership held steady during the 2012-13 season despite concerns that the change with insurance requirements would result in lower number of Member Clubs. Technology for our membership was hugely enhanced this year through the new website. An easier process for noncompetitive membership was created by a batch upload, saving time for both the club owners and National Office.

2013 Sabre World Cup. The 2013 Absolute Fencing Gear® Korfanty World Cup is an indicator of the successful first steps for USA Fencing to increase tournament sponsorship and reduce costs. We generated $64,739 of value in kind and cash sponsorship this year. This is an 80% increase from the 2012 Sabre World Cup. The UIC venue provided us with more opportunities to bring in more value in kind sponsorship due to fewer restrictions than typical convention centers. The value in kind received both improved the experience for the athlete, fans, and officials, as well as reduced costs. The true cash expense to run the sabre world cup this year was $184,000 after considering the non-cash effect of the value in kind expenses. This is a reduction in cash expense output by $43,000 or 19%. All numbers are reflective of the information available as of June 21, 2013.

2013 Summer Nationals. This year’s 2013 Summer National is turning out to be the largest fencing competition in history. As our competition grows we continue to look for ways to control the costs and one of the ways that we have done this is by working our relationship with current sponsors, the Columbus Sports Commission and the city. In addition to the $50K in donated venue rental space we have received in Columbus we generated an additional $34K in cash and value in kind sponsorship. These are all new sources of revenue as in 2012 we only received donated venue rental space in the amount of $126,500. Although the donated venue rental amount is less this year, our out of pocket venue cost is $0 as opposed to $73,500 in prior year. Additionally, USA Fencing has worked with the Sports Commission to get discounts to restaurants and other attractions in Columbus to improve the experience for all attendees.

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Marketing. The department focused on our two most marketable properties - The 2013 Absolute Fencing Gear® Korfanty World Cup and USA Fencing Summer Nationals. In Chicago, USA Fencing moved the World Cup to a more suitable location within the city, thus increasing event relevancy and exposure in an already saturated media capital. For the first time USA Fencing ticketed the tournament. Athlete gift bags were distributed which included sponsor-provided items such as athletic tape, nutrition bar, event t-shirt and the event program adding event credibility. In Columbus, OH, USA Fencing has received tremendous local fencing club and citywide support. In addition, you will see an enhanced look, feel and presentation of the tournament. USA Fencing will have venue banners, music and announcements at the finals’ stage and signage in hotels and local restaurants.

Website. For the past quad, the site had been hosted by the U.S. Olympic Committee this did not allow for customization of the site or for the page to have a look and feel that were appropriate for attracting potential and future fencers, nor did it allow us to work outside the box and bring in alternative sources of income. The new site launched in late December not only is more aesthetically appealing, but it is easier to navigate in all areas. The site provides many features that the previous site did not, i.e. the ability to upload videos, stream content, create user groups, etc…including the ability to capture revenue generating opportunities such as advertising, direct membership registration, direct tournament registration, pay-per-view events, photo store and a direct annual giving portal. Traffic on the site continues to improve with more than 30,000 unique visitors coming to the page each month for upwards of 400,000 page views each month.

Event Streaming. For the first time ever, both the individual and team finals of the Absolute Fencing Gear® Korfanty World Cup were streamed live from Chicago. The event was commentated by USA Fencing President Don Anthony and 2008 Olympic silver medalist Tim Morehouse and viewed nearly 9,000 times by fencing fans around the world.

Social Media. USA Fencing’s social media presence has continued to expand as our Facebook and Twitter pages have more followers and traffic than almost any other national fencing federation in the world. Recently, the Facebook page has reached more than 10,000 Likes – a figure eclipsed only by .

2. Operations Plan Strategic Accomplishment Highlights A. Goal 1: Generate sustainable revenue from internal and external sources a. General donation revenue up over 2011-12 by 53% reflecting an increase in over $12,000. b. 63% increase in overall membership numbers generating new revenue of over $93,000 (8% increase in revenue). c. $329,000 of new sources of funding…increasing value in kind funding by 40% and cash by 49%. d. Overall increase of $64,739 value in kind and cash sponsorships for 2013 sabre world cup an 80% increase from the 2012. e. Formal development plan was created for diversifying and increasing annual giving revenues. f. Generated $83,708 of value in kind and cash sponsorships for 2013 Summer Nationals. B. Goal 2: Grow and promote the sport of fencing and its traditions a. Launched new website in late December 2012. b. 63% increase in overall membership. c. Website grew to more than 30,000 unique visitors and upwards of 400,000 page views each month. d. Facebook page reached more than 10,000 Likes. e. Moved the world cup to a more suitable location increasing event relevancy, presentation, exposure and the first ticketed tournament.

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f. Summer Nationals has an enhanced look, feel and presentation of the tournament: i.e. venue banners; music and announcements at the finals’ stage; and signage in hotels and local restaurants. g. First time individual and team finals of the Absolute Fencing Gear® Korfanty World Cup were streamed live from Chicago. h. The numbers for Columbus stand at 3,753 unique individuals; 7,225 total competitors and 411 teams. This reflects a 107% increase over the final numbers for this tournament in 2012 in individuals and 108% increase in total competitors and a 103% increase in the number of teams. C. Goal 3: Continually improve sports performance and development a. Obtained a 4 year grant From USOC to fully fund the men’s epee resident/national coach. b. In wheelchair fencing we secured one coach accepted into the full ICECP (international coaching enrichment certificate program) and an additional coach into the two week module in Colorado Springs. c. Continue to improve the competition experience and training opportunities for our wheelchair athletes. d. Finalized an agreement with NYU Medical Center to provide rehabilitation services, red carpet medical treatment, and sports science to our athletes in the New York area. e. 16 of our 20 London team members have continued fencing at the international level this season. D. Goal 4: Achieve and maintain organizational excellence a. On track to meet our projected $840,000 positive net income. b. Paying down on our accounts payable by $958,000. c. Technology for membership hugely enhanced through the new the new website. d. Improved best business practices, management and procedures. e. There were 28 strategic objective established for 2012-13 of which 79 % of the strategic objectives were completed (22) and 21% of the strategic objectives are still in progress (6).

3. Current Significant Issues

• USOC’s Safe Sport minimum standards requirements for NGB’s must be in place by December 31, 2013. While USA Fencing has already met some of the standards, we will need to review and update some items to be in complete compliance. Items that will need to be addressed:

. Formal policy on bullying and hazing . A policy to include emotional and physical misconduct . Education program developed by January 1, 2014, . Expansion of background screen policy

• USA Fencing is required to submit a formal Diversity and Inclusion (D&I) Plan to the Olympic Committee (USOC) by October 31, 2013 meeting the requirements for National Governing Bodies (NGBs) set by Section 220511 of the Ted Stevens Olympic and Amateur Sports Act. The USOC has provided a template for the D& I plan to assist in the process. All NGBs will need to provide information regarding the participation of women, disabled individuals, and racial/ethnic minorities in NGB athletic, governance and management activities. The plan must detail programs and initiatives that encourage the participation of women, disabled individuals and racial/ethnic minorities within the organization.

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• USA Fencing will be required to add the following sections to our organization’s bylaws meeting requirements of the USOC 2012 Audit governance compliance: Safe Sport; Elite Athlete Rights; Athlete Ombudsman; Code of Conduct (Board, committees, staff, officials and coaches); Conflict of Interests and Ethics; Conflict of Interest Annual Disclosure Certification (Board, committees and staff); Independent Ethics Committee; Independent Director Definition (adoption of USOC criteria); Gender Equity; Authorization and Commitment to Amateur Sports Act, USOC Constitution and Equal Opportunity; and Allowable Business Gifts and Entertainment for Board, committees and staff.

• USA Fencing has received a notice of non-renewal from Bollinger/Markel. Our insurance broker, Caroline Florez with Summit America, is now quickly exploring other insurance coverage options for the organization.

• The USOC’s Safe Sport program is encouraging clubs, parents and coaches to help prevent child sexual abuse in sport by launching a year-long Make the Commitment: Stop Abuse in Sport campaign. The USOC is teaming with NGBs to deliver free tools and training to help clubs, coaches and parents make the commitment. Through newsletters, campaign resources and training webinars, we will provide actionable information on a different topic each month to help participants understand, address and help prevent sexual abuse in sport.

4. Team USA Fencing Sustained Competitive Excellence Highlights

While many sports have problems with athlete retention during the year following the , I’m pleased to report that 16 of our 20 London team members have continued fencing at the international level this season and are working hard to prepare for the 2016 Games in Rio, including four of the six athletes who finished in the top eight in London.

When the World Cup season began in January, many of our athletes had to juggle NCAA schedules with the international circuit. However, our athletes still reached new levels of success with four of our six weapon squads earning medals on the circuit. Our men’s foil team had its most successful season ever as Team USA opened the season with a first ever gold medal win in followed by three straight silver medal finishes. Individually, (#4), Alexander Massialas (#7) and (#8) are all ranked in the top eight after winning six individual medals between them. The women’s saber team is now ranked third in the world after three bronze medal finishes at World Cups and a gold in Chicago where the ladies defeated – the three-time reigning Senior World Team Champions. Mariel Zagunis is ranked #2 in the world after six individual podium finishes and Dagmara Wozniak is sixth. Ibtihaj Muhammad broke through this season to win her first World Cup medal. The women’s foil team earned its best result on the circuit since the 2008 Games when Team USA placed fourth in Tauberbischofsheim. and Nzingha Prescod both hold top-eight rankings as well with Prescod shooting up the charts after becoming the first U.S. woman’s foil fencer to win a Grand Prix title in Marseille. The U.S. Men’s and Women’s Epee Teams are both ranked in the top four and are aiming to build on the success of the 2012 season. Although the U.S. Men’s Saber Team has suffered the loss of 2008 Olympic silver medalists James Williams and Tim Morehouse, Daryl Homer has had one of his best years on the World Cup circuit with three top-eight finishes.

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At the junior and cadet levels, U.S. athletes stood on the podium every weekend during the five-month season. Their successes culminated in a Junior and Cadet World Championships where Team USA won 10 medals total, including three gold. While Olympians Alexander Massialas and Lee Kiefer each added to their career medal haul with a gold and bronze, respectively, the Junior and Cadet Worlds also resulted in breakout performances from some of our newer athletes. Less than three years after picking up the sport, saber fencer Adrienne Jarocki won a silver medal and anchored the U.S. Women’s Saber Team to its first title since 2006. First-time team members Ariel Simmons and Jake Raynis won gold and bronze in the cadet men’s epee competition as well, marking the first time two U.S. men’s epee fencers have ever stood on the same podium at the tournament.

Our future remains bright across all levels and we are looking forward to helping put our athletes in the best position possible to win gold in Rio and beyond.

Respectfully submitted, Val Belmonte

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