Letter from the Treasurer

The IEEE Statement of Financial Position reflects total assets of $438.4 million and $436.2 million at 31 December 2011 and 2012, respectively. The slight decrease is primarily due to the investment loss offset by an increase in capitalized equipment related to IEEE Business Platform (IBP). While IEEE total liabilities were $176.1 million and $190.7 million at 31 December 2011 and 2012 respectively, the increase of $14.6 million was primarily due to deferred income, accrued pension, and other. Overall, IEEE Net Assets decreased to $245.5 million from the 2011 year-end balance of $262.4 million.

In 2012, IEEE had total revenues of $383.8 million, a decrease of $9.1 million from 2011, as shown on the Statement of Activities, primarily due to the following:

  • Net investment revenue decreased $28.5 million vs. 2011. The net investment loss in 2012 is being shown as a net expense in lieu of a reduction of revenue.
  • Intellectual property (IP) revenue, including society non-member subscriptions, increased $8.5 million or 5.0%, primarily due to sales of the IEEE/IET Electronic Library (IEL), which represented $9.7 million of the increase, partially offset by a decrease in other IP of $1.2 million.
  • IEEE Standards Association revenue, exclusive of IP revenue from IEL and IEEE Standards Online Library, increased $2.4 million.
  • IEEE Society Operations revenue increased $2.2 million over 2011.
  • Conference event revenue increased $1.9 million, exclusive of IP revenue from conference proceedings included above.

The operating surplus in 2012 was $12.5 million, offset by pension and related benefit expense adjustment and investment loss of $16.5 million; the asset write-off of $5.8 million related to the IBP project, and other net expense items of $7.0 million that resulted in an overall net deficit of $16.8 million. IEEE received an unqualified opinion from Mitchell & Titus, LLP in the Report of Independent Auditors. The independent auditors met with the IEEE Audit Committee to discuss the scope and results of their audit, their review on the adequacy of internal accounting controls, and the quality of financial reporting prior to issuing their opinion. IEEE is tax exempt under Section 501(c)(3) of the Internal Revenue Code. The IEEE Foundation is a separately incorporated related organization of IEEE; accordingly, its audited financial statements are not included in the accompanying documents. I submit these reports with confidence that IEEE continues to be a financially sound organization.

Harold Flescher

2012 IEEE Treasurer

Report of Independant Auditors

We have audited the accompanying consolidated statements of financial position of The Institute of Electrical and Electronics Engineers, Inc. (the Institute) as of December 31, 2012 and 2011, and the related consolidated statements of activities and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Institute’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. We were not engaged to perform an audit of the Institute’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Institute’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Institute of Electrical and Electronics Engineers, Inc. at December 31, 2012 and 2011, and the changes in its net assets and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

Mitchell & Titus LLP

June 22, 2012