1. Member Value Proposition: Financial Analysis TAB FinCom Meeting 17 May 2011

2. 2 Data Points Important! For Analysis, assume any dues increase applied directly to TA –Source of funding needs BoD approval  IEEE Reserves?  TA Reserves? Assumes no change in Member Direct Infrastructure Does not remove/exclude current members who have more than one S/C membership (322,000 Society Memberships; 195,000 Members) –Will these members retain multiple memberships?

3. 3 Data Points 2010 stats and actuals (FM13) were used for comparison –Member Dues (excludes optional revenue) Periodicals Group reviewed product portfolio and provided assumptions for Basic & Enhanced Membership components To allocate IEEE members with no Society Affiliation used the current S/C breakdown Only 10% of IEEE students with no S/C affiliation were given a S/C membership –Membership is optional not automatic for students

4. 4 Data Points Basis for comparison is the Incremental Net under different scenarios –Incremental Net = Society Dues Revenue – Incremental Print Cost of Membership

5. 5 Comparison to Three Scenarios Three Scenarios at varying Dues Increases –Applied at Basic Membership level –$0, $5, $10, $15 All Basic –All current S/C memberships and those IEEE members with no S/C affiliation would choose a Basic membership

6. 6 Comparison to Three Scenarios All Enhanced –All current S/C memberships, including Life members, and IEEE members with no S/C affiliation would chose an enhanced membership (price varies based on S/C offering).  Removed from final comparison – highly improbable Likely –40% of current S/C memberships would chose a Basic Membership & 60% would chose an Enhanced Membership. All IEEE members with no S/C affiliation would chose a Basic Membership.  Percentages based on Survey  IEEE members includes 10% of students

7. 7 Results Total TA Impact shown, not individual S/C net impact –Keep individual S/Cs at steady state Worst Case Scenario @ $0 Dues Increase –~($5M) variance to 2010 Net Likely Scenario @ $5 Dues Increase –Near breakeven ~$0.6M variance to 2010 Net

8. 8 Results

9. Assumptions

10. Today = 2010 Actual data/stats. Scenarios assume the "Net" includes some portion of revenue from Basic Membership to TA; the amounts assumed are noted on each row. Only 10% of IEEE Students with No Homes were given a S/C membership; Membership is optional to students not automatic. Member Dues Revenue equals Total Membership Dues (Excludes member Optional Revenue). Incremental COM Expenses includes 2nd Class US, 2nd Class Non US, Freight & Other, Airfreight, mailing, paper, binding, printing, label preparation & customer service expenses applied to the S/C publications bundled with membership. Incremental costs associated with digital products not accounted for in this scenario since they are negligible All Basic scenario assumes all current S/C memberships & IEEE "No Home" members would chose a basic membership ($15). All Enhanced scenario assumes all current S/C memberships & IEEE "No Home" members would chose an enhanced membership (price varies based on S/C offering). In most cases, 2011 Membership dues were used for Enhanced dues unless the current rate was less than or equal to $15, then set at $20 The Likely scenario assumes that 40% of current S/C memberships would chose a Basic Membership & 60% would chose an Enhanced Membership. All IEEE "No Home" members would chose a Basic Membership (includes 10% of IEEE students) Definitions "Net" = Dues Revenue minus incremental expenses associated with providing membership "No Home" = IEEE Members that do not have a Society affiliation