Independent auditor’s report

Independent auditor’s report – AAAI News

Robert H. Burnham

The Board of Directors American Association For Artificial Intelligence Menlo Park, California

I have audited the statement of financial position of American Association for Artificial Intelligence as of December 31, 2002 and the related statements of activities, changes in net assets and cash flows for the year then ended. These financial statements are the responsibility of the Association’s management. My responsibility is to express an opinion on these financial statements based on the audits.

I conducted the audits in accordance with generally accepted auditing standards. Those standards require that I 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. I believe that the audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of American Association for Artificial Intelligence as of December 31, 2002 and the results of operations and cash flows for the year then ended, in conformity with generally accepted accounting principles.

Changes in Net Assets: Gross Profit (Loss), By Activity:

AI Magazine Revenue $7,659

AI Magazine Expenses 191,290 $(183,631)

Memberships Revenue (Note 4) 272,673

Memberships Expenses (126,804) 145,869

AAAI Press Revenue 125,389

AAAI Press Cost of Sales (147,015) (21,626)

Spring Symposium 2002 Revenue 56,188

Symposium Expenses (61,658) (5,470)

Fall Symposium 2002 Revenue 34,585

Symposium Expenses (45,140) (10,555)

Conference Service Fees 46,900

Conference Service Expenses (46,900) -0-

Technical Program ’02 Revenue 295,113

Program Expenses (453,598) (158,485)

2002 Exhibits Revenue 17,000

Exhibits Expenses (25,372) (8,372)

Prior Year Events Revenue 27,500

Expenses (4,594) 22,906

Miscellaneous Income 813

KDD Sponsorship 7,021

Interest & Dividend Income 275,366

(investments & cash accounts)

Realized & Unrealized Gains (1,151,531)

(loss) on Investments (Note 1A)

Investment Management Fees (83,320)

Grants & Scholarships Expended (395,772)

Gross Profit (Loss), Combined (1,566,787)

Operating Expenses (638,467)

Net (Decrease) in Net Assets (2,205,254)

Net Assets – January 1, 2002 9,487,682

Net Assets – December 31, 2002 $7,282,428

American Association for Artificial Intelligence Statement

of Activities and Changes in Net Assets for the Year Ended

December 31, 2002. The accompanying notes are an integral

part of this statement.

Robert H. Burnham June 3, 2003

COPYRIGHT 2003 American Association for Artificial Intelligence

COPYRIGHT 2003 Gale Group