Audited consolidating financial statements: Tax Executives Institute, Inc. and TEI Education Fund.

• Position: 2016 Annual Report

June 30, 2016

CONSOLIDATING FINANCIAL STATEMENTS Consolidating statements of financial position Consolidating statements of activities Consolidating statements of cash flows Notes to the consolidating financial statements Independent Auditor's Report

To the Board of Directors Tax Executives Institute, Inc. and TEI Education Fund

We have audited the accompanying consolidating financial statements of Tax Executives Institute, Inc. and TEI Education Fund (collectively, the Organization), which comprise the consolidating statements of financial position as of June 30, 2016 and 2015, and the related consolidating statements of activities and cash flows for the years then ended, and the related notes to the consolidating financial statements.

Management's Responsibility for the Consolidating Financial Statements

Management is responsible for the preparation and fair presentation of these consolidating financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidating financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these consolidating financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidating financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidating financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidating financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Organization's preparation and fair presentation of the consolidating financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidating financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidating financial statements referred to above present fairly, in all material respects, the individual and consolidated financial positions of Tax Executives Institute, Inc. and TEI Education Fund as of June 30, 2016 and 2015, and the changes in their net assets and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Tate & Tryon

Washington, DC

July 25, 2016

Consolidating Statements of Financial Position Years Ended June 30, 2016 and 2015 2016 TEI TEIF Total Assets Cash and cash equivalents $ 734,383 $ 105,916 $ 840,299 Investments 10,434,410 10,434,410 Accounts receivable 30,536 30,536 Due (to) from affiliate (6,108) 6,108 -- Prepaid expenses 73,909 73,909 Property and equipment 1,023,198 1,023,198 Total assets $ 12,290,328 $ 112,024 $12,402,352 Liabilities and net assets Accounts payable $ 76,826 $ 309 $ 77,135 Accrued liabilities 298,779 298,779 Deferred revenue 3,076,957 3,076,957 Deferred rent and 834,244 834,244 lease incentive Total liabilities 4,286,806 309 4,287,115 Commitment and -- contingencies Net assets--unrestricted 8,003,522 111,715 8,115,237 Total liabilities and net $ 12,290,328 $ 112,024 $ 12,402,352 assets 2015 TEI TEIF Total Assets Cash and cash equivalents $ 649,769 $ 97,880 $ 747,649 Investments 10,859,690 10,859,690 Accounts receivable 29,605 29,605 Due (to) from affiliate (6,424) 6,424 -- Prepaid expenses 77,293 77,293 Property and equipment 84,796 84,796 Total assets $ 11,694,729 $ 104,304 $ 11,799,033 Liabilities and net assets Accounts payable $ 122,084 $ $ 122,084 Accrued liabilities 189,929 189,929 Deferred revenue 2,925,446 2,925,446 Deferred rent and 227,209 227,209 lease incentive Total liabilities 3,464,668 -- 3,464,668 Commitment and -- contingencies Net assets--unrestricted 8,230,061 104,304 8,334,365 Total liabilities and net $ 11,694,729 $ 104,304 $ 11,799,033 assets Consolidating Statements of Activities Years Ended June 30, 2016 and 2015 2016 TEI TEIF Total Revenue Sponsorships $ 1,895,400 $ -- $ 1,895,400 Continuing education 1,695,150 1,695,150 Membership dues 1,580,993 1,580,993 Royalty 535,000 535,000 Publications 436,850 436,850 Interest and dividends 186,653 18 186,671 Initiation Fees 134,325 134,325 Other 10,154 10,154 Management Fees (10,232) 10,232 -- Total revenue 6,464,293 10,250 6,474,543 Expense Program services Continuing education 2,103,480 2,188 2,105,668 Publications 780,002 780,002 Committee and liaison 685,244 685,244 Membership services 419,328 419,328 Dues transferred to 207,960 207,960 chapters Total program services 4,196,014 2,188 4,198,202 Supporting services General and 2,414,671 651 2,415,322 administrative Total expense 6,610,685 2,839 6,613,524 Change in net assets (146,392) 7,411 (138,981) from operations Net realized and...