2002 Annual Report Connectivity Creativity

2002 Annual Report connectivity creativity

change

Table of Contents

1 Executive Message

2 Highlights/Events

14 Corporate Directory

16 Financial Message & Statements Executive Message for the 2002 Annual Report

customer needs and anticipate future SAE also signed Memoranda of Under- needs and services. As such, SAE in standing (MOU’s) with the VDI Society 2002 embraced a philosophy of for Automotive and Traffic Systems enhancing the organization’s value (VDI-FVT), the automotive branch of proposition through increased the Association of Engineers in attention to customer service. Germany; Society of Automotive Engineers of Japan; and the The Board established a Task Force to Motorsports Industry Association in address ways to enhance SAE’s value the U. K. These agreements signify a to suppliers and manufacturers. After new era of joint cooperation among many meetings with corporate leaders, our respective organizations. the Task Force issued several We take great pleasure in writing this recommendations, including calls for We were in India for the official signing Executive Message because it significant changes to the SAE World of the documents that formally grant- provides an opportunity to reflect and Congress. As a result, the 2003 SAE ed SAE India affiliate status. The put forth an honest assessment of World Congress was radically altered signing of this MOU marks only the how well SAE is measuring up to its to meet the needs of our corporate second time in SAE’s 97-year history mission and objectives. customers, while still providing the rich that an affiliate society had been content and learning opportunities that established. If pressed to characterize 2002 in a our individual members seek. single word, that word would be The move to enhance SAE’s value “change;” we believe that the This year, the Board approved chang- proposition led to a major reorganization organization experienced more es to its composition that will provide of our staff. While the move was painful, profound change in 2002 than at any for more direct representation by the this “rightsizing” has reallocated staff, point in SAE’s nearly 100-year history. industries SAE serves; three new Vice streamlined operations, and resulted in But, along with challenge comes President positions were added to the an organization that is competent, lean, opportunity. We’re pleased that SAE Society’s leadership ranks. Robert E. and positioned to quickly respond to has risen to meet numerous Spitzer, Vice President of External challenges and opportunities. challenges, grown stronger and more Technical Affiliations and University resilient, and is better prepared to Technical Relationships, The Boeing What does 2002 mean in the context remain vital well into the 21st century. Company, will fill the first Vice Presi- of SAE’s history? It means that SAE, dent’s position. This is key, because despite having to face many The most troubling external change SAE is the home of aerospace engi- unexpected challenges, has retooled agent was the tragic events that neers, and we intend to sharpen our and realigned resources to better unfolded on September 11, 2001, which focus on the aerospace industry. meet the needs of our many and immediately forced the cancellation of varied customers. several of SAE’s fall meetings. Thanks SAE’s staff also focused on meeting to member and staff planning, each of the needs of the automotive industry. In closing, remember that SAE Inter- these events was successfully Our Troy office underwent a successful national is your organization – your produced at a later date. makeover and has been branded as involvement and continued support is the SAE Automotive Headquarters. It critical to achieving SAE’s mission. Another change agent affecting SAE in is important that the world’s pre- 2002 was the economy. SAE under- eminent automotive technical society Sincerely, stands that we can no longer expect maintains a visible, active presence in support from our members and their the world’s automotive centers. employers merely because we are a professional society. Like companies In 2002, SAE successfully partnered within the mobility industry, SAE has to with the United States Department of earn its business every day by Defense, Department of Energy, and S. M. Shahed delivering value in everything we do. the Federal Aviation Administration on an assortment of conference and The SAE Board of Directors and program offerings. Plans are in the executive staff recognized that SAE offing for similar joint ventures with needed to better understand current many of these partners in 2003. Raymond A. Morris

SAE International 2002 Annual Report 1 SAE International What is a Brand?

The quest to define and maximize the impact of the SAE International brand led to a yearlong project that resulted in a new logo and some essential changes in the way the organization uses its logos.

Marketing texts might define a brand as a “name, sign or symbol used to identify your products or services and to differentiate them from goods of your competitors.” In short, a brand is a promise. By identify- ing and authenticating a product or service with the SAE brand, we deliver a pledge of satisfaction and quality to all who encounter our brand.

The SAE Organizational Identity and Branding Manual was created in 2002 to give SAE staff and member volunteers a resource for correct- ly using and promoting the SAE brand.

One of the important outcomes of the SAE branding program in 2002 was the creation of an SAE Aerospace logo that will help unify the many members of SAE who work in the aerospace community. The logo also defines the relationship to SAE, and it will help brand the thousands of aerospace standards, events, and publications SAE creates for aerospace professionals.

2 Connectivity Creativity Change SAE Automotive Headquarters We Connect

2002 brought re- • Strengthen the membership of the industry representatives. The attend- newal, restructuring local SAE Detroit Section through ees came from 12 countries, 86 com- and results to the increased and creative marketing panies, five universities and two U. S. members and staff activity. governmental agencies. This Sympo- of SAE. After de- sium facilitated the timely sharing of cades of existence All of these objectives are driven by a information between both the SAE as the SAE Detroit desire to increase market awareness Standards Committee and the SAE Branch Office, our of SAE as a supplier of unique, sys- Research Project Team, and also Troy-based opera- tem-oriented, automotive technical provided the opportunity for world- tion has evolved into information. This awareness hinges wide industry input into their future the SAE Automotive on our ability to meet or exceed the work projects. Headquarters. demands of SAE customers in a cost- effective manner. Cooperative Research Program: A name change in- SAE’s Cooperative Research Pro- volves more than gram continues to provide a forum just a new sign over for the industry to pool its resources the door. Recogni- and share in results of research and tion as SAE’s Auto- 2002 Ground Vehicle studies in numerous pre-competitive motive Headquarters serves as one Activities and technology areas. This year, Elec- component of a systemic improve- Accomplishments tronically Controlled Braking Sys- ment: connecting customer service tems and CAESAR Anthropometric with corporate brand management, CAESAR Database: The CAESAR data gathering projects were com- member needs with organization North American database product pleted. Work continues in High Strain goals and, most importantly, industry was made available to the Rate Plastics testing, J1939 Commu- challenges with innovative solutions. public. The CAESAR (Ci- nication Protocol and Alternate Re- vilian American and frigerants. New projects under con- As SAE begins its journey in a new European Surface An- sideration include Otologic Trauma, direction, we must keep the follow- thropometry Re- Ergonomic Design Tools and Event ing program objectives in sharp focus: source) project is the Data Recording. result of a compre- • Increase awareness of SAE’s signif- hensive research 42-Volt Electrical Sys- icant presence and impact on the effort that brought tems: SAE continues Detroit area. together represen- to provide industry • Enhance SAE’s reputation as a glo- tatives from nu- leadership in the bal leader in automotive standards merous indus- area of 42-volt elec- development through consolidated tries including trical systems. 2002 support and leadership. apparel and aero- was a very busy and space as well as auto- productive year as • Secure SAE’s position as a portal of motive. CAESAR be- SAE led the industry in technological and engineering excel- gan as a partnership developing standards lence by quickly and efficiently ad- between government and educating the auto- dressing the local needs of members. and industry to collect motive community on the • Anticipate local automotive needs the most extensive needs and challenges associated and provide a facility to develop glo- sampling of consumer with transitioning to a higher voltage bal solutions through local presence body measurements for electrical system. SAE made presen- and established relationships. comparison. The project collected tations at two universities, eight SAE three-dimensional data on approxi- Section meetings, ten conferences, • Highlight the SAE commitment to a mately 2,400 U. S. and Canadian citi- and provided eight dedicated 42-volt timely and pro-active effort in keep- zens and over 2,000 European civilians. Professional Development opportu- ing up with the evolving automotive nities. In addition, the first SAE 42- industry. Alternate Refrigerants Sympo- volt standard was published in 2002 • Increase SAE’s role in value-added sium: The 2002 SAE Alternate Refrig- for 42-volt blade fuses, with addition- connection between automotive erant Systems Symposium held in al specifications slated for publica- OEMs and suppliers. Scottsdale, Arizona, hosted 220 world tion in 2003.

SAE International 2002 Annual Report 3 Fuel Cell Standards: The SAE Fuel Social Council (ECOSOC) Cell Standards Committee has posi- based in New York City. tioned itself as the undisputed global This status provides SAE leader in the development of stan- a formal seat at the reg- dards and recommended practices ular sessions of WP29 for mobility applications of fuel cell and its subsidiary bod- technology. Three published docu- ies, which meet in Gene- ments – including a critical, interna- va, Switzerland. tionally harmonized, vehicle-to-fuel- ing station interface, the first-ever fuel This past year, SAE spon- cell vehicle safety J-document, and a sored two Fellows: one in preferred practice recyclability guide- the White House Office of line that addresses “sustainable de- Science and Technology velopment” – were added to SAE’s Policy (OSTP) focusing on aerospace Environmental Protection Agency Terminology document in 2002. In policy issues; and one on the staff of (EPA), and the National Science order to build industry consensus and Senator John Warner (R-VA), focusing Foundation (NSF). create the best possible scenarios for on homeland security and energy is- global harmonization of the Fuel Cell sues. SAE also hosted a number of Finally, SAE’s Washington, D. C., office Standards Committee’s products, the interns from various universities as was active in numerous aerospace, following agreements and working part of the Washington Internship for math and science education, environ- relationships were formed: liaison Students of Engineering (WISE) pro- mental, and safety coalitions to en- agreement with the ISO TC22 SC21; gram. In 2002, SAE’s Washington, D. sure our continued involvement in liaison agreement with the IEC TC105 C. office, secured a $144,000 grant for providing the best technical input into WG-#6; Memorandum of Understand- WISE from the NSF. policy discussions. As part of these ing (MOU) with the JEVA (Japanese efforts, we co-sponsored numerous Electric Vehicle Association); working On-going activities of SAE’s govern- Capitol Hill luncheon briefings on fuel relationship with the EIHP-II (Europe- ment affairs office, located two blocks cell technology, emissions, math and an Integrated Hydrogen Project); MOU from the White House, include: rais- science education, and aerospace with the National Fire Protection As- ing the visibility and image of the au- research and development funding. sociation; and an agreement with tomotive engineering community; CEN’s advisory task force on Hydro- serving as a liaison with government gen Fuel Specification. agencies, Capitol Hill, and Executive Branch staff and members on domestic and international regulatory and 2002 Aerospace Activities legislative standards, as well as re- and Accomplishments search and development issues; serv- 2002 Proves to be a ing on environmental Executive Com- New Sector Vice President Set to Busy Year for SAE mittees; serving on UN Safety, Secu- Assume Office in 2003: On March Government Affairs Office rity, and Environmental committees; 4, 2002, the SAE Board of Directors and representing SAE on engineering approved changes to its composition SAE’s Washington, D. C., staff had a and education coalitions. Additional that will provide for more direct rep- very productive year in 2002. Espe- projects include developing public resentation by the industries SAE cially significant for SAE was our awareness strategies for Congres- serves. Three new Vice President work on the United Nations (UN) sional members and staff; managing slots – Vice President Aerospace, Vice World Forum for Harmonization of SAE White House and Capital Hill In- President Automotive, and Vice Pres- Motor Vehicle Regulations (WP29). ternship and Fellowship programs; ident Heavy Duty/Commercial – have Importantly, in July of 2002, SAE re- coordinating annual Government/In- been added to the Society’s leader- ceived Special Consultative status dustry meeting; preparing monthly ship ranks. Elected individuals will by the UN as a Non-Government Or- editorials for SAE trade publications; serve three-year terms in their re- ganization (NGO) to participate in seeking funding for SAE cooperative spective offices. sessions overseeing the develop- research programs; and coordinating ment of international vehicle regu- and managing research contracts An aerospace professional will fill lations. This special designation with the U. S. Department of Defense the first Vice President’s slot. At its came from the UN’s Economic and (DOD), Department of Energy (DOE), September 10, 2002, meeting, the

4 Connectivity Creativity Change Board nominated Robert E. management and AS8879C, Screw Threads-UNJ Pro- Spitzer, Vice President of oversight, linkages file, Inch Controlled Radius Root External Technical Affilia- with other organi- with Increased Minor Diameter: tions and University Tech- zations, and ad- Over the past few years, SAE has be- nical Relationships, The dressing new tech- come the leading standards organi- Boeing Company, to serve nologies. The Aero- zation for the conversion of DOD stan- the inaugural term as SAE’s space Council will dards and specifications. One signif- Vice President Aerospace. complete and be- icant activity worth noting was the Mr. Spitzer’s extensive gin enacting the publication of AS8879C. This standard background makes him plan in 2003. was generated to provide an alterna- uniquely qualified for this tive to the inactive government spec- position. In October 2002, Robert E. Spitzer SAE Responds ification MIL-S-8879 for screw Mr. Spitzer’s nomination to 9/11: In order to threads-UNJ profile, inch. During went before the membership for a ensure that SAE is prepared to react 2003, Committee E-25 will develop a vote; he was approved and will as- quickly to national or international companion document to provide sume the office in March 2003. emergencies related to safety or se- some history on the development of curity, the Aerospace Council creat- screw thread standards (MIL-S-8879 The Vice President will provide a di- ed a process for the rapid develop- and AS8879) and the rationale for the rect voice to the Board of Directors ment of standards. The process can content of AS8879 Revision C. on issues and needs important to the be used for the creation of a standard aerospace industry, and will allow SAE within 30 days and was adopted Americas Aerospace Quality to respond to those needs in a timely across the entire TSB. Group (AAQG): The SAE AAQG pub- manner. Chief among the Vice Presi- lished five significant documents in dent’s duties: advising the SAE Presi- SAE A-6 Reorganized: A-6 revised its 2002 including: dent on the aerospace industry; serv- charter to better address the demands ARP9004 - Direct Ship - Recom- ing as chairperson for the Aerospace for enhanced technology in powered mended Practices for Program Office; and serving as flight controls. New technology envi- Aerospace Companies spokesperson on aerospace matters ronments include more complex mixed in the absence of the SAE President. power distribution, hybridized hydrau- AS9101A - Quality System lic and electric actuation, and a focus Assessment Aerospace Standards: Aerospace on EHA/IAP/EMA, integrated actuation AS9120 - Quality Maintenance Standards had a record year in 2002. and control and a focus on unmanned Systems - Aerospace - Under the Aerospace Council of the vehicles. Committee A-6 is now titled Requirements for Technical Standards Board (TSB), the “Aerospace Actuation, Control & Fluid Stockist Distributors program published over 577 new and Power Systems” with three Subcommit- revised standards. This brings the to- tees: A-6A (Systems/Subsystems Inte- AS9132 - Data Matrix (2d) Coding tal number of active SAE aerospace gration), A-6B (Actuation & Control) and Quality Requirements for standards (AS, AMS, ARP, AIR, ARD) to A-6C (Power Generation & Distribution). Parts Marking over 6,300. The primary reason for the recent program growth is due to the conversion of DOD military standards and specifications. Since the beginning of the DOD Acquisition Reform program, SAE has converted over 1,500 “milspecs” to SAE standards. The DOD adopted more standards from SAE than they adopted from any other standards developing organization.

Also in 2002, the Aerospace Council initiated the development of a strategic plan. The plan focuses on five major elements: global considera- tions, improved standards processes,

SAE International 2002 Annual Report 5 AS9133 - Qualification Procedure ference to be held in Eu- for Aerospace Standard rope in 2004. Parts • Activities and cooperation The AAQG continues to represent the with Verein Deutscher Americas Sector through its associa- Ingenieure (VDI), the Ger- tion with the International Aerospace man Association of Engi- Quality Group (IAQG). The purpose of neers, were greatly ex- this association is to establish and panded this year. A com- maintain a dynamic cooperation be- prehensive Memoran- tween international aerospace com- dum of Understanding panies on initiatives to make signifi- (MOU) was signed be- cant improvement in quality and re- tween SAE and VDI at the ductions in cost throughout the val- 2002 SAE World Con- ue stream. gress. SAE’s first joint meeting with VDI, the Dig- ital Human Modeling Con- ference, was held in June in Munich. Plans are underway for many more SAE Meetings and Conferences: cooperative efforts. A Cooperative Effort • SAE’s World Aviation Con- gress has joined with the SAE offers its conference attendees International Council of extra value by partnering with other the Aeronautical Scienc- societies and organizations around the es, which represents avi- world to present a broader scope of ation organizations in 32 information than any one organization countries, to organize/ can offer on its own. During 2002, chair technical sessions such cooperative activities ranged and provide speakers for from organizing a single session to full each other’s events. partnerships. For example: • SAE and the Consumer Electronics Association • The annual International Congress (CEA) held the first ever on Environmental Systems, admin- Digital Car Conference, co-located Ground Deicing International Con- istered by SAE, is a partnership of with the SAE World Congress in ference, which will be held for the AIAA, AIChE, ASME, and SAE tech- March. Over 45 exhibitors and 1,300 first time in 2003. nical committees, along with an in- delegates focused on in-vehicle elec- ternational committee representing • The SAE General Aviation Technolo- tronics and information technology primarily Europe and Asia. gy Conference (GATC) provided a applications. The SAE/CEA collabo- forum for the FAA’s General Avia- • Continuing a long-term relationship ration also saw SAE organizing tech- tion Forecast Conference and Des- with the Austrian Society of Engi- nical sessions on 42 volts and wire- ignated Engineering Representative neers and Architects (OIAV), which less applications for passenger cars (DER) seminar. Other DER seminars, began in 1995 with the Total Life for the Consumer Electronics Show which provide ongoing certification Cycle Conference and Exposition, in Las Vegas in January. for aerospace engineers, are SAE and OIAV continue to provide • The American Ceramics Society planned in conjunction with future a forum for worldwide environmen- contributed to the organization of SAE conferences. tal issues and experts. In 2002, this the five fuel cell-related sessions at partnership continued with the En- • Aerospace North America and SAE the 2002 World Congress. vironmental Sustainability Confer- continue to collaborate on the bien- ence held in Graz, Austria. Planning • At the Federal Aviation Administra- nial Aerospace Congress & Exhibition, is currently underway for the next tion’s (FAA) request, SAE agreed to the premier North American confer- Environmental Sustainability Con- administer an In-Flight Icing/ ence for the aviation industry.

6 Connectivity Creativity Change • SAE reached an agreement with the With a mouse click and a few keyboard applications, hybrid electric technol- DOD to administer its 2002 DOD taps, up to 250 audience members ogy, power electronics, energy stor- Maintenance Symposium & Exhibi- conveyed non-verbal comments and age, advanced internal combustion tion in October. answered polls during the presenter’s engine design, lightweight materials speech. At the same time, the pre- applications and future fuels. SAE will continue to explore and de- sentations were streamed to the Web, velop partnering opportunities to ful- so people all over the world could in- Over 800 attendees were also able to fill its mission of advancing the mobil- teract. Over 40 locations connected examine the latest technology and ity community. via the World Wide Web from countries vehicles at the exhibition. An added as far as the United Kingdom, Germa- attraction in 2002 included a ride-and- 2002 SAE World Congress: A chal- ny, Korea and Australia. drive activity conducted at the Fed- lenging year for the world’s largest eral Highway Turner-Fairbank Re- automotive technology conference Regarded as the first interactive Web search Facility. Each attendee could produced encouraging results. The stream of this magnitude and con- drive the latest vehicles featuring fuel 2002 World Congress, hosted by Ford text, the high-tech, two-way commu- cells, hybrid/electric drives, diesel en- Motor Company, recorded higher nication format was intended to gines or hydrogen SI engines from a OEM and international attendance than the previous year, as well as increased media attendance. The technical program featured a record 274 half-day sessions, including special Executive Panels that focused on issues such as vehicle styling, the role of diesel engines in the future, and hybrid electric vehicles. The exhibition show- cased the latest technology from 1,000 firms that serve the global automotive industry.

(UPdate, 10-02, page 3) Another feature of the World Con- gress was the co-location of the SAE Digital Car Conference in Michigan Hall. The 2002 World Con- gress had numerous highlights, including: the annual Honors Convoca- show how SAE is on the cutting edge variety of domestic and overseas tion; Cultural Diversity Workshop; En- of learning technology. It has creat- manufacturers. gineering/Management Symposium; ed the “e-factor:” energy, enthusi- Business Panel on India; Spotlight asm, and excitement. FCC continues a partnership with the Panel on China; and an International DOE and USCAR that showcases the Reception. 2002 Future Car Congress: The top technologies that will be used to biennial 2002 Future Car Congress design and produce the energy effi- The World Congress drew to a close (FCC) was held in Arlington, Virginia cient vehicles of tomorrow. with a successful annual banquet fea- in early June. As in 2000, SAE admin- turing remarks by James J. Padilla, istered FCC for the DOE. The event 2002 Off-Highway Congress: In Group Vice President, Ford North was co-sponsored by the United cooperation with the Construction America, Ford Motor Company. States Council for Automotive Re- Industry Manufacturers Association search (USCAR). Richard Parry-Jones and the International Concrete and 2002 Digital Car Conference: In a of Ford Motor Company chaired the Aggregates Group, the SAE Interna- clever nod to high-tech communica- executive committee that organized tional Off-Highway Congress was co- tions, people attending the Digital Car three plenary sessions. These ses- located with the CONEXPO-CON/AGG Conference technology sessions sions started each day’s technical trade show held in March in Las Ve- channeled instant comments to pre- program, which featured presenta- gas. Approximately 2,100 SAE mem- senters via a Web link. tions on fuel cells for transportation bers attended the meeting and trade

SAE International 2002 Annual Report 7 show. The event featured technical the lowest in five years. The greatest International, and receive all regular sessions provided by SAE and the losses in membership occurred out- member benefits. National Fluid Power Association, as side of North America. well as the world’s largest exhibit of Over the past seven years, member- off-highway technology. ship in SAE India has grown from 200 to approximately 6,000 members, including 4,500 student members with SAE India Becomes An four sections spread over key automo- Local Activities and Official SAE Affiliate tive centers of India. During that same Attendance Reach time period, SAE India organized two Milestone In the fall of 2002 in New Delhi, India, mobility conferences, several 2002 SAE President S. M. Shahed, TOPTECs, workshops, student compe- Member participation in local activi- along with SAE Executive Vice Presi- titions, created an SAE India Website, ties reached an all-time high in 2002. dent Ray Morris, signed an MOU with and contributed several papers. SAE A total of 693 section events were engineers in India that formally grant- India has also established the SAE In- held, an increase over last year’s 596 ed SAE India affiliate status. The sign- dia Foundation, which is tasked with activities. Additionally, member at- ing of this MOU is a major milestone various educational initiatives. tendance at these events exceeded in SAE’s global development initiatives. 23,000, a ten percent increase from 2001. This success can be attributed The event marks only the second time to the hard work and dedication of in SAE’s 97-year history that an affili- SAE’s local section officers who im- ate society has been established. The Global Initiatives Keep plemented new, interactive meeting first such occasion was the establish- President Shahed Busy formats such as live web casts. ment of SAE Brazil in 1992. SAE hon- ored commitments made during a visit President Shahed had a busy sum- in 1969 by then-President Phil Myers mer traveling outside North Ameri- to support engineers and automotive ca on behalf of SAE. In June, an SAE engineering students in India. delegation including Shahed, SAE Student Membership Sets Executive Vice President Ray Morris, Record The effort to establish an SAE India and SAE’s Global Development Man- Affiliate was started in 1995 by then- ager Murli Iyer participated in the The dramatic growth of SAE’s Colle- President John Leinonen. Since Pres- Naples Section meeting in Italy. giate Design Series, both within North ident Leinonen’s trip to India, every About 100 members and nonmem- America and internationally, has driv- subsequent SAE President has made bers were involved in a “One Day en membership in the student sector a trip there as well, encouraging the Workshop” held at the Instituto Mo- to an all-time high of 17,500. While local leaders in the formation of the tori, Naples. Shahed discussed student membership reached record affiliate society. The staff at SAE also Progress in Fuels and Diesel Engine numbers, the same was not true for worked closely with SAE India leaders Technology, while Morris gave a talk professional membership. Renewal and members to establish this affiliate. about SAE’s globalization efforts. rates dropped two points to 80 percent and new member growth was Affiliate status allows the local indus- The group then traveled to Catania, try, universities, and engi- located near the Mediterranean Sea neers to take advantage of in the southern part of Italy, where the global connection and Shahed gave a technical presentation reach of SAE. Additionally, at the University of Catania before a an affiliate has its own lead- visit to the facilities of the world’s ers, manages its own busi- largest microchip producer—STMi- ness based on local econom- croelectronics. ic conditions and currency, and provides technical infor- A stop in Turin to visit Fiat-GM Power- mation relevant to its mem- train and the Fiat Research Center pre- bers. Members of both SAE ceded a July visit to France to meet India and SAE Brazil enjoy with Claude Cham, newly elected Pres- dual membership within SAE ident of French automotive society SIA,

8 Connectivity Creativity Change sports community. previous year and established an all- Both organizations time record. share a common interest in promoting Customization and hands-on learning engineering educa- were two elements companies re- tion and inspiring stu- quested frequently in 2002. While cus- dents to become the tomization can be as simple as add- next generation of ing some company-specific informa- mobility professionals. tion to one of SAE’s publicly offered seminars, it often involves creating a The SAE Foundation whole new course from the ground up. and Education Rela- And hands-on learning took on a tions Board have es- whole new dimension when SAE con- tablished successful ducted a complete engine teardown

SAE President Shahed presents a plaque commemorating Ivan P. programs with the session for a corporate client. Ksenevitch’s designation as an SAE Fellow. Ksenevitch is SAE’s SAE Collegiate Design consultant in Russia and Vice President of the Russian Academy Series and the “A Looking ahead, e-Learning will begin of Engineering. World In Motion” pro- playing a larger role in keeping engi- gram, which is geared neers current as training directors and and Daniel Pfrimmer, CEO of SIA. SAE toward students ages in grades four engineering managers monitor time and SIA reviewed the MOU that exists through eight. The MIA has enlisted away from work and return on every between the two groups. support for the Education Council In- training dollar. ternational, including participation by The group then traveled to Romania, universities, as part of its efforts. where Shahed made a presentation on turbochargers at the Bucharest The first event slated for joint coor- Polytechnic University. The group dination between the two organiza- SAE Publications also visited the facilities of Honeywell tions is the co-located Motorsports – Garrett and Daewoo’s Craiova plant Engineering Conference and Perfor- SAE Fuel Cell Technology Col- before heading to Russia. On July 22, mance Racing Industry Show, slated lection on the Web: The SAE Fuel the delegation visited NAMI, where for December in Indianapolis. Plans Cell Technology Collection on the SAE’s first Russian section was es- are underway for additional cooper- Web was released in 2002. The Col- tablished. While there, Shahed ative ventures. lection includes more than 200 SAE awarded certificates to the winners technical papers, many of which are of the Student Design Competition in color, from the 1960s through held at Vladimir University. Cash priz- February 2002. es donated by the Detroit Section under the Global Section Partnership SAE In-House Corporate Highlights of this product include: full- program were given to the competi- Learning Hits Record Levels text papers, all easily searchable; rel- tion winners. evant information about fuel cells and Shortly after September 11, 2001, fuel cell technology; ideas to help more companies than ever began tak- businesses progress with fuel cell ing advantage of SAE’s corporate technology; as well as general fuel cell learning service, whereby training is automotive information, including SAE and Motorsport conducted on company premises for what the future holds. Industry Association Sign groups of employees. Cooperative Agreement The SAE Fuel Cell Technology Collec- Normally, SAE’s Professional Develop- tion on the Web covers a broad range SAE and the Motorsport Industry As- ment unit works with about 35 com- of topics, including emissions, infra- sociation (MIA), a trade group based panies a year to deliver standard or structure, vehicle development, appli- in the United Kingdom, signed an MOU customized training on company pre- cations, and importantly, standards in March 2002, expressing a willing- mises. In the period from October and codes of practice. The Collection ness to collaborate on education and 2001 to September 2002, this activi- is user-friendly and features free tech- engineering activities in the motor- ty nearly doubled compared to the nical support from SAE.

SAE International 2002 Annual Report 9 The Standards Handbook for more overwhelming amount of tech- Aeronautical and Astronautical nical information, than their leading Engineers: Also in 2002, SAE released competitors. The Standards Handbook for Aeronau- tical and Astronautical Engineers. This AEI led in engineering feature editori- volume, co-published with McGraw- al with 677 pages to the combined Hill, is the first comprehensive resource coverage of 614 for the magazines two expressly for aerospace engineers. main competitors. The magazine was even more dominant in global cover- In the past, aerospace engineers and age (188 versus 67 pages) and lead- students have had to access a wide ing-edge automotive electronics con- array of trade publications and tent (87 versus 17 pages). books for comprehensive coverage of their highly specialized industry. In 2002, the Magazines group also suc- With this publication, those practi- cessfully led a redesign of Aerospace tioners now have a resource that de- Engineering, giving it a more contem- livers a combination of reference porary, cleaner look, and took over material and other data in a single, publishing responsibility for the Service easy-to-use volume. Technicians Society’s official magazine, Service Tech. From ba- sic engineering New Marketing science Strategy for SAE information, where the selections and math- will be cross-referenced to related ematics to As part of an organization-wide products/services. Also, we now use astrodynam- effort to be more responsive to electronic newsletters to provide ics, this book member needs, SAE re- the latest in product/service infor- is the one re- vamped how it markets its mation to our members/customers source that all products and services. via electronic mail in the categories starting and of auto, aero, heavy-duty/commer- mature aero- The new marketing philos- cial, and motorsports. space engineers ophy revolves around de- need to take veloping and marketing SAE has also taken steps to strength- their work to our products and servic- en our organizational identity and new heights. This es in a way that our cus- brand. In this strategy, all of our com- handbook con- tomers expect – by industry sec- munications with our members and tains contributions from more than 50 tor (auto, aero, heavy-duty/commer- customers now reflect a consistent aerospace specialists and is edited by cial, maintenance) and topic areas image. By leveraging a strengthened an internationally renowned aeronau- (brakes, aerospace quality, vehicle dy- brand image, SAE can better capital- tical engineering expert and educator. namics, etc.). The result is a market- ize on our globally-recognized excel- ing tack that yields lower-volume but lence in developing and delivering more targeted direct mail opportuni- lifelong learning products/services Automotive Engineering ties. An example of this type of effort and consensus industry standards. International (AEI) would be a promotion piece on en- Continues Global Expansion gines that includes the latest and best- selling seminars, books, electronic Customer Relationship In a troubled economy, the maga- products, and meetings. Management Centralizes zines of SAE came through 2002 in Sales, Marketing and good shape. For example, the ad- Additionally, SAE is using more Web Customer Service Functions vertising-page market share of AEI and electronic mail initiatives to bol- was a record 53 percent for 2002. ster our marketing reach. Many pro- In a major change relative to the way The AEI’s editors created more than motional efforts look to drive potential SAE interacts with its customers and twice as much editorial, and an even customers to the Web for additional members, customer service resources

10 Connectivity Creativity Change from around the organization were ability to combine engineering ex- Formula SAE® Series – The 2002 combined to form a Customer Relation- pertise with a full range of project Formula SAE competition attracted ship Management (CRM) group. management skills. Design exper- a record 118 teams, representing tise alone is not enough; teams must universities in the United States, In laying the groundwork for this shift, complete their projects on time and Canada, Mexico, Puerto Rico, En- SAE explored many customer service be ready to explain all of their deci- gland, Japan, Australia, Korea and models and strategies, settling on the sions to the judges. Venezuela. Cornell University won customer relationship management the competition for the second model. SAE’s working definition for In 2002, the competitions attract- strait year, establshing a new record CRM is “a business philosophy that ed over 500 teams to the events in high score of 927.6 points out of a aligns its people, processes, and tech- North Ameri- nology around customer needs and ca and more builds a long-term relationship based than 800 on mutually-received value.” teams worldwide. With In the past, SAE’s customer service over 5,000 functions were largely decentralized student com- and scattered throughout the orga- petitors an- nization. The new CRM group com- nually, these bines sales, marketing and customer competitions service functions into cohesive units are SAE’s that serve as the customer’s single- most impor- point of contact for a variety of issues. tant contri- This group is tasked with maintaining bution to the a laser-like focus on the customer, education of the next genera- paying attention to both the needs of tion of engineers. Addition- members as well as those of the in- ally, these competitions are possible 1,000, finishing first in four dustry-at-large. our leading vehicle for introducing events in the process. students to the benefits of SAE This represents a fundamental, orga- membership. Formula Student in the U. K. and For- nization-wide shift in philosophy re- mula SAE® Australasia are further garding customer interactions. CRM 2002 Clean Snowmobile Chal- proof that the Formula SAE series champions will lead the change in the lenge™ (CSC) – Kettering University provides educational opportunities SAE corporate mindset to one that and the University of Idaho shared that today’s students and their future exemplifies the concept of delivering first place honors at the third annual employers in the mobility industry, value consistently – and with one SAE CSC held in Jackson Hole, Wyo- demand. At FSAE-Australasia, the voice – in every customer interaction. ming. CSC requires student teams to University of Wollengong swept the design and build a low emission, low dynamic events and finished first noise, trail snowmobile. Winning the over 14 Australian universities, best- competition requires developing a du- ing teams from Germany, Japan and rable snowmobile that will perform the U. S., as well. Educational Relations well in a variety of tests. Highlights A World In Motion (AWIM) Mini Baja® Series – The Mini Baja Collegiate Design Events: The series continues to grow and attract Teacher Workshops – Throughout competitions of SAE’s Collegiate De- new teams from around the world. 2002, the AWIM program was very in- sign Series have become an impor- The three universities from South volved in providing teacher training for tant aspect of engineering educa- America that participated in Midwest the curriculum. Workshops were held tion around the world. These events Mini Baja set an impressive record. in cooperation with two national teach- challenge students to design, fabri- The two Brazilian entries from Cen- er conferences: the International Tech- cate, test, and compete with a ve- tro Universidad UniFE finished third nology Association conference and the hicle that achieves the objective of and sixth, while the first entry from National Science Teachers Associa- the event. Success in our design Argentina, Instituto Technologico tion conference. Also, the Oklahoma competitions depends on a team’s Buenos Aries, came in eleventh. and Connecticut state departments

SAE International 2002 Annual Report 11 of education sponsored AWIM work- The award, given annually since its in- SAE Process Resource shops during the 2002 school year. ception in 1998, recognizes teachers Center (PRC) Science centers such as Milwaukee who have effectively implemented Discovery World, San Diego Aero- the SAE Foundation’s A World In Mo- Over the past year, facilitation and space Museum, and the Boonshoft tion program to further develop stu- process consultation have become an Museum in Dayton, Ohio, actively pro- dents’ understanding of the principles integral part of SAE’s member and vided AWIM professional develop- of motion and the science that un- staff operations. Since its inception ment opportunities for teachers. Uni- derlies them. It honors the work and in 2000, the PRC has provided SAE versities such as California University dedication of Lloyd Reuss, former with expertise in these areas. The of Pennsylvania, St. Cloud State in President of General Motors Corpo- PRC focuses on providing change Minnesota, and the University of Cen- ration and a long-time supporter of leadership to grow SAE and is tral Florida also provided sites for the AWIM program. achieved by systematically driving change and process improvements throughout the organization. Key organizational changes in 2002 result- ing from PRC leadership include: the reorganization of SAE; strategic planning for SAE’s operating boards/com- Stevenson has taught mittees and staff leadership; sharp- fifth grade students at the ening the focus on SAE’s automotive, AWIM teacher training. AWIM contin- Caroline Bentley Elementary School aerospace and heavy duty business ues to provide opportunities for vet- in New Lenox for over 20 years. She initiatives; and conducting Kaizen ac- eran AWIM teachers to share their earned her Bachelor’s degree from Il- tivities to maintain a clear focus on “best practices” with those just dis- linois State University, and later her the customer through continuous covering the curriculum. Masters in Education from Indiana process improvements. Wesleyan University. AWIM Challenge Four – SAE staff spent the better part of 2002 develop- Also, Pamela Schmitt, a seventh and ing A World In Motion Challenge 4 cur- eighth grade teacher in Cedar Falls, riculum that will explore electricity and Iowa, received the 2002 SAE Gary Dick- Service Technicians Society how it relates to self-propelled vehi- inson Award for Teaching Excellence. (STS) Highlights cles. AWIM Challenge 4 will consist of a CD-Rom with two “hands on” ap- This annual award, recently established During 2002, the STS Board of Gover- plication kits filled with exciting edu- by the SAE Detroit Section, recognizes nors reorganized the society’s structure cational activities. The kits will provide an outstanding middle school teacher to encourage growth among specialty students with the opportunities to con- and school for the best use of the SAE segments. The good news: member- struct such things as lemon juice bat- Foundation’s A World In Motion: Chal- ship for the society held steady in a teries and magnetic motors. The cur- lenges 2 & 3 curriculum to further de- rocky economic environment. More riculum will target grades 4 through velop students’ interest in math and importantly, STS increased revenue 40 10 and will be available for classrooms science. It commemorates the life of percent and decreased expenses by in spring 2003. The same principles Gary Dickinson, an automotive indus- 12.5 percent over fiscal year 2001. integral to A World In Motion Challeng- try leader and long-time supporter of Additional highlights: es 1, 2 and 3 are also in Challenge 4. both SAE and its AWIM program. Students will learn the “engineering • STS completed its first research design experience” by participating in Schmitt has taught at the Saint Patrick project for a group of OEMs and Tier design challenges that integrate lan- School in Cedar Falls for over 14 years. 1’s on “Technician Diagnostic guage arts, social studies, mathemat- She received her Bachelor’s degree Needs.” ics, science and technology. from the University of Northern Iowa • Service Tech magazine remained the and has been an active educator highest rated STS membership 2002 Teacher Awards – Sharon since her graduation. In addition to product. Stevenson, a fifth grade teacher in her teaching duties, Schmitt is in- New Lenox, Illinois, was awarded the volved in an assortment of leadership • Siegel/STS Scholarship was award- 2002 SAE Lloyd Reuss Award for roles at the school and within the ed to four students at technology Teaching Excellence. Archdiocese of Dubuque. colleges in Montana.

12 Connectivity Creativity Change • The American Society of Associa- CAP Executive Strategic Planning • The SAE Foundation web cast fea- tion Executives recognized the Board launched another Task Group turing G. Richard Wagoner, Jr., Pres- STS Recruiter Kit and the STS Fu- on Electronic Card Assembly/Print- ident and CEO of General Motors ture TIP (Technology Input Pro- ed Wire Boards. In 2002, the PRI Corporation, has won two awards gram) with awards. Board approved a business plan for – an award of honor in the Nation- NADCAP expansion into Asia. It’s al Communicator Awards compe- • STS launched its first technical train- projected that PRI will conduct 20 tition and an award of merit from ing sessions, drawing over 500 at- audits in Asia in 2003, with over 350 the Public Relations Society of tendees to nine different locations. audits projected in Asia for 2004. America, Pittsburgh Chapter Re- naissance Awards. Mr. Wagoner Information Partnership Program dis- The new Primes subscribing to addressed SAE’s Detroit Section at tributed thousands of donated tech- NADCAP in 2002 will result in PRI the Detroit Science Center; his top- nical manuals and CDs to members. conducting 110 percent more au- ic was “The Future of Global Tech- dits over the next two years. In or- nology Leadership: Can We Get der to support this growth, PRI has There From Here?” developed and launched an electronic auditing software package • In recognition of his numerous con- Performance Review designed to computerize every fac- tributions and outstanding leader- Institute (PRI): 2002 Sets et of the auditing process. Detailed ship, the SAE Foundation estab- Stage for Triple Digit Growth plans have been developed on such lished the Ableson Award for Vision- critical issues as auditors, technical ary Leadership to honor former SAE PRI had a very solid year in 2002, con- experts, staff, equipment, and Foundation Chairman, 1999 SAE ducting over 1,796 audits. This rep- space needs. Recognizing that President, and SAE Foundation Can- resents a 20 percent increase over nearly all of this growth will be in ada President, Donald W. Ableson. the record number of audits con- aerospace, PRI Registrar has devel- The award is the highest recogni- ducted in 2001. PRI’s total revenue oped a stable of AS9100 qualified tion that the Foundation board be- for 2002 was approximately $8.7 mil- auditors that rivals any of its com- stows on an individual who has ex- lion, which is a $2 million increase petitors. The PRI Registrar remains hibited exemplary leadership both over 2001’s figure. Additionally, it is committed to its vision and mission within his/her industry and to both projected that PRI’s year-end mar- to “raise the bar” for the third party SAE and the SAE Foundation. gins will exceed $550,000. This will certification industry. result in current net assets of ap- • The SAE Foundation Cup, awarded proximately $1,600,000. to the first place team from the For- mula SAE Design competition, has The activities of 2002 have set the SAE Foundation Notables been renamed in honor of Neil A. stage for an extraordinary future. Schilke, 2001 SAE President. Boeing subscribed to National Aero- The following highlights were taken space and Defense Contractors Ac- from the SAE Foundation’s 2002 an- • The SAE Foundation sponsored creditation Program (NADCAP), as nual report: the Sally Ride Science Club® Sci- did Vought Aircraft, MD Helicopter, ence Festival for Girls that took Bell Helicopter, and NASA. Collec- • General Motors announced the do- place at the University of Michigan tively, this group of subscribing nation of VIN #000002, one of 25 in September 2002. Alba Colon, Primes has a larger group of special vehicles produced as part of the Chevy NASCAR Racing Program process suppliers (the core of PRI’s Chevrolet SSR Signature Series, to Manager at General Motors, rep- business) than any previous year’s the SAE Foundation. Excitement resented the Foundation at a group of subscribers or any future about the launch of the SSR has workshop she conducted titled annual group that might join. This been building for several years “Keeping Safe at 200 MPH.” Co- increase in subscribing Primes was since it was introduced as a con- lon, who began her affiliation with further supplemented by launching cept vehicle. The vehicle will be SAE as the team captain for the two additional NADCAP Special Pro- auctioned on eBay® in April 2003. Formula SAE Collegiate team rep- cesses – Composites and Noncon- Proceeds from the auction will ben- resenting the University of Puerto ventional Machining Surface En- efit the Heinz C. Prechter Award for Rico, Mayaguez, was thrilled to hancement (NMSE). Also, the NAD- Automotive Excellence. meet her mentor, Sally Ride.

SAE International 2002 Annual Report 13 Society of Automitive Engineers, Inc. Corporate Directory

The 2002 SAE Board of Directors

2002 President 2003 President-Elect 2001 President S. M. Shahed Jack E. Thompson Neil A. Schilke Vice President, Advanced Director, CAE & Concept Development General Director of Engineering, Products & Systems Advance Vehicle Engineering Corporate Staffs Garrett Engine Boosting Systems DaimlerChrysler Corporation General Motors Corporation Honeywell International, Inc.

Executive Vice President 2002 Treasurer 2002 Assistant Treasurer and Secretary Karl Goering Greg W. Henderson Raymond A. Morris Vice President F-16 Chief Systems Engineer SAE International Application and System Engineering Lockheed Martin Aeronautics Co. Automotive Chassis Division Robert Bosch Corporation

Directors One-Year Term (2002) Pierre Alegre, Jr. Arthur Howland Brian R. Richardson Director, Program Management Ford Motor Company (retired) Director – Marketing Bombardier Aerospace Corporation John R. Kinstler Delco Remy International Chuck W. Allport Vice President Engineering Renee T. Sears Assistant to the Academic Vice President Hayes Lemmerz International Director, Vehicle Interior Engineering Cedarville University Bruce D. Peters Nissan Technical Center North America, Inc. Manager, Diesel Technology Fiat Auto Powertrain Italia

Directors Two-Year Term (2002 – 2003) Stephen D. Burdette Daniel M. Hancock William R. Leppard Chief Executive Officer Manager Principal Research Engineer Fiat – GM Powertrain Product Safety & Regulation GM Research & Development Center Technical Center Donald G. Hillebrand Terence J. Rhoades CNH Global NV Manager, Research Policy Vice President DaimlerChrysler Corporation Bernard J. Cousyn AVL Powertrain Engineering, Inc. Research Engineer Gerald S. Jakubowski, Ph.D. PSA Peugeot Citroen Dean College of Science and Engineering Loyola Marymount University

Directors Three-Year Term (2002 – 2003 – 2004)

Eden H. C. Chen Douglas C. Johnson Landon J. Sproull Principal Consultant, Transportation President Assistant Chief Engineer Chen Technology, Inc. Cal-Draulics, Inc. Peterbilt Motors Company Teresa A. Hundley D. Brad Keleher Keith Barend Termaat Supervisor, Product Engineering Senior Engineer CEO Delphi Energy & Chassis Systems John Deere & Company Suntree Associates, Ltd. Robert L. Ireland Director, Training Devices & Facilities United Airlines, Inc.

14 Connectivity Creativity Change Affiliates

SAE Brasil Av Paulista 2073 Horsa 11 C CEP 01311 940 Sao Paulo, Brazil Phone: 011 55 11 287 2033 Fax: 011 55 11 288 6599

SAE India Room No.1, Ground Floor ISTE Professional Centre, Anna University Staff Quarters Campus, Gandhi Mandapam Road, Chennai - 600 025. Corporate Headquarters Phone : 91-44-24411904 Telefax : 91-44-24411904 400 Commonwealth Drive E-mail : [email protected] Warrendale, PA 15096-0001 Phone: 724-776-4841 Fax: 724-776-5760 Performance Review Institute (PRI) http://www.sae.org 161 Thornhill Road Warrendale, PA 15086-7527 Automotive Headquarters Phone: 724-772-1616 755 West Big Beaver Road Fax: 724-772-1699 Suite 1600 http://www.pri.sae.org Troy, MI 48084 Phone: 248-273-2455 Fax: 248-273-2494 Service Technicians Society (STS) 400 Commonwealth Drive Branch Office Warrendale, PA 15096-0001 Washington, D. C. Phone: 1-800-787-9596 Fax: 724-776-2644 1300 I Street, N.W http://www.sts.sae.org Suite 1090 Washington, D. C. 20005-3314 Phone: 202-962-8691 SAE Foundation Fax: 202-962-8692 400 Commonwealth Drive Warrendale, PA 15096-0001 Phone: 724-776-4841 Fax: 724-776-0038 http://www.sae.org/foundation

SAE Sections/Groups Outside North America Joint Sections

Minsk, Belarus St. Petersburg, Russia Mogilev, Belarus Volga, Russia Bucharest, Romania SAE Beijing, China Aviation and Astronautics Development, Russia Brasov, Romania Cairo, Egypt Central Proving Ground, Russia Constantza, Romania Hong Kong Orenburg, Russia Naples, Italy Zhukovsky (Moscow), Russia Kuala Lumpur, Malaysia VTK, Russia Mexico Taipei, Taiwan Bryansk, Russia Kiev, Ukraine Moscow, Russia United Kingdom Nizhni Novgorod, Russia

SAE International 2002 Annual Report 15 The Financial Message To all SAE International Members

We are pleased to present the SAE fiscal In non-operating activities, SAE invested Financial Audit Committee, monitors the year 2002 audited financial statements for $2.2 million in development activities to system of accounting and internal con- your information and review. The accom- fund new programs. Development activi- trols, investment management, and the panying reports are: the Independent ties are generally funded with income professional competency and integrity of Auditor’s Report, Statements of Financial and realized gains from the General In- persons performing these functions. The Position, Statements of Activities and vestment Fund. In 2002, however, in- independent auditors have direct access Changes in Net Assets, Statements of Cash vestment activities finished with a loss to the Financial Audit Committee to dis- Flows, and the Notes to Financial State- of $3.9 million, due primarily to a decline cuss the scope and results of their audit, ments. The SAE Foundation and the Ser- in the market value of long-term invest- their comments on the adequacy of inter- vice Technicians Society are unincorpo- ments. The investment in development nal accounting controls, and the quality rated affiliates of SAE and, accordingly, are activities, when combined with long- of financial reporting. included in the accompanying financials. term investment losses and a one-time The actual accounts of SAE and the SAE adjustment for early retirement pension If you would like more details about the Foundation are maintained separately and expense, result in a total non-operating accompanying financial statements or any the respective funds are not co-mingled. loss of $7.0 million. aspect of financial operations at SAE, please feel free to contact either of us or The Statements of Financial Position reflect Net assets decreased $9.9 million during Dana Pless, Chief Financial Officer at SAE total assets of $52.7 million at the end of 2002 as a result of the operating and and World Headquarters [email protected]. the fiscal year. The decrease in total as- non-operating losses noted above. The de- sets was $10.6 million, or a decrease of crease in net assets for the year of $9.9 mil- 16.7% compared with 2001, due to losses lion, when combined with net assets at the Respectfully submitted, in both operating and non-operating activi- beginning of the year of $47.9 million, result ties. Despite this decline in assets, we be- in $38.0 million net assets at year-end. lieve you will find the Statements of Finan- cial Position show SAE continues to be fi- In addition to the Audit Report informa- nancially well positioned to provide strong tion which follows, we were pleased once Karl Goering member service activities in the future. again to receive a favorable management Treasurer letter from our independent auditors [email protected] In 2002, the Statements of Activities and commenting on excellent internal ac- Changes in Net Assets reflect SAE operat- counting controls and accurate financial ing revenues of $51.1 million. The net loss reporting from SAE. from operations was $2.9 million. Operat- ing revenues were $8.6 million short of bud- As a reminder, please recall that SAE is get expectations. Cost containment initia- tax exempt under Section 501(c)(3) of the Gregory W. Henderson tives, which included a significant workforce Internal Revenue Code. Ultimate respon- Assistant Treasurer reduction, were implemented during the fis- sibility for the financial statements and [email protected] cal year. These initiatives offset much of other information in the annual report the revenue shortfall without any significant rests with the SAE Board of Directors. The impact on services to our members. Board, through its Finance Committee and

Society of Automotive Engineers, Inc.

We have audited the accompanying statement of financial position of the Society of Automotive Engineers, Inc. as of September 30, 2002, and the related statements of activities and cash flows for the year then ended. These financial statements are the responsibility of the Society’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from the Society’s financial statements and, in our report dated Novem- ber 9, 2001, we express an unqualified opinion on those financial statements.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Society of Automotive Engineers, Inc. as of September 30, 2002, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Stelmack Dobransky & Eannace, LLC Joseph S. Stelmack, CPA, Member November 1, 2002 November 1, 2002 (except for Note 17, as to which the date is November 21, 2002)

16 Connectivity Creativity Change Society of Automotive Engineers, Inc. Statements of Financial Position September 30, 2002 and 2001 (000’s omitted)

See Independent Auditor’s Report and Notes to Financial Statements

SAE International 2002 Annual Report 17 Society of Automotive Engineers, Inc. Statements of Activities and Changes in Net Assets For the Year Ended September 30, 2002 With Comparitive Totals For the Year Ended September 30, 2001 (000’s omitted)

See Independent Auditor’s Report and Notes to Financial Statements

18 Connectivity Creativity Change Society of Automotive Engineers, Inc. Statement of Cash Flows For the Years Ended September 30, 2002 and 2001 (000’s omitted)

See Independent Auditor’s Report and Notes to Financial Statements

SAE International 2002 Annual Report 19 Society of Automotive Engineers, Inc. Notes to Financial Statements For the Years Ended September 30, 2002 and 2001

20 Connectivity Creativity Change Society of Automotive Engineers, Inc. Notes to Financial Statements For the Years Ended September 30, 2002 and 2001

15 8

9 16

10 17

SAE International 2002 Annual Report 21 Society of Automotive Engineers, Inc.

Raymond A. Morris, CAE Executive Vice President & Secretary

Reed Smith Legal Counsel

Cohen & Grigsby, P.C. Legal Counsel

Salomon Smith Barney Inc. Investment Counsel

Oppenheimer Capital Corporation Investment Counsel

INVESCO – National Asset Management Investment Counsel

Roxbury Capital Corporation Investment Counsel

Bowling Portfolio Management Investment Counsel

Stelmack Dobransky & Eannace Auditors

William M. Mercer, Inc. Actuaries-SAE Pension and Beneficiary Association Programs and Compensation Consultants

400 Commonwealth Drive Warrendale, PA 15096-0001 Phone: (724) 776-4841 Fax: (724) 776-5760 http://www.sae.org