Finance Committee Meeting I. Final Report on the Closure of the 2015 Financial Year 1. Management Letter 2015 2. Financial Statements 2015 3. Balance Sheet (as at 31.12.2015) 4. Accumulated Year-End Fund Balances (as at 31.12.2015) II. Status Report on 2016 Financial Matters 1. Projected Realisation of 2016 Budget 2. NMO Contributions 2016 (current status) 3. External Funding Report 2016 (forecasted) III. Contribution Level, Category A+ 1. Contribution Level, Category A+ IV. Proposed Budget 2017 1. COUN-89-V: Proposed Budget 2017 2. NMO Contributions 2017 V. Development and Fundraising Activities 1. Overview and Status Report VI. Other Business

1. Final Report on the Closure of the 2015 Financial Year ITEMS: 1. Management Letter 2015 (document only, no slide) 2. Financial Statements 2015 (document only, no slide) 3. Balance Sheet Detail (as at 31.12.2015) 4. Accumulated Year-End Fund Balances (as at 31.12.2015)   Do not spend too long on this section; 2015 closure was the focal point of the June Finance Committee Meeting

Financial Closure 2015: Final Report The positive results of the financial year 2015 were reported on during the June 2016 Finance Committee meeting. In the meantime, the financial statements – which were preliminary at the time of the last meeting – are now fully audited and published. The annual closure meeting involving the external auditors, the Chair of the Finance Committee and representatives from IIASA took place on Thursday 20th October 2016. The Final Audit Findings letter (also known as Management Letter) has also now been issued.   The final report on 2015 should be brief as we already presented the result at the June Council Meeting. The 3 main things that have happened since June that should be mentioned are that: the Financial Statements are now fully audited and posted to the website the Closure Meeting has taken place (20th October 2016) the Final Audit Findings letter (Management Letter) has been issued

Balance Sheet Detail, 2008 – 2015 Do not spend too long on this slide – it was presented during the June Council Meeting Balance Sheet provides a snap-shot summary of the Institutes assets, liabilities and equity at any point in time (in IIASA’s case, this point in time is always 31st December of the given year) Information here is taken straight from IIASA’s Financial Statements (Balance Sheet) ASSETS : what the Institute has Non-current Assets : includes equipment, machinery, computers, furniture, etc Current Assets : includes money on bank accounts/investments, work in progress (external money due to IIASA for ongoing projects), membership contributions due (e.g. if by 31st December an NMO has not yet paid its Contribution, the amount is included here) Assets held in trust : RBP LIABILITIES : what the Institute owes Non-current Liabilities : includes provision for employee benefits (severence pay) Current Liabilities : includes deferred income (external money received in advance), membership contributions prepaid (e.g. if by 31st December an NMO has already paid its contribution for the next year), provision for unused vacation Trust Liabilities : RBP EQUITY : shown on the liability side of balance sheet and is the difference between Total Assets and Total Liabilities. Equity can be seen as the value of the entity Restricted Funds : includes fixed asset fund (i.e. the current value of the Institutes fixed assets) General Reserve : referred to in the Balance Sheet as Unrestricted Funds

Accumulated YE Fund Balances (until YE 2015) Do not spend too long on this slide – it was presented during the June Council Meeting This graph shows the detail of total equity, which is shown on the liabilities side of the balance sheet and is basically the difference between assets and liabilities (it is the part of the previous graph that uses the same colours) Total Equity goes up or down by the result of the income statement The red section shows Restricted Funds, which is predominantly the Fixed Asset Fund (in other words, the book value of all of the fixed assets that belong to the Institute). This remained constant between 2014 and 2015 in line with the strategy to align CapEx spending with annual depreciation The blue section shows Unrestricted Funds, which is predominantly the General Reserve (a.k.a. retained earnings).

2. Status Report on 2016 Financial Matters ITEMS: 1. Projected Realisation of the 2016 Budget 2. NMO Contributions 2016 (current status) 3. External Funding Report 2016 (forecasted)  

Projected Realisation of the 2016 Budget The main message here is that current forecasts indicate that compliance with the budget in 2016 is looking good, and we are actually not likely to need all of the approved EUR 1m draw on reserves (current forecast is that ca. EUR 650k of the approved EUR 1m will be needed). Our best projections at the moment indicate that between EUR 300k and EUR 400k of the draw on reserves will not be needed in 2016, and the budget proposal for 2017 therefore requests that these funds will be transferred into the 2017 budget. If they materialize, figures for NMO and External Income and external income will be records figures. NMO Income is currently projected at EUR 12.75m (it is however stressed that this assumes that all NMOs will pay, and includes receipt of a full category D contribution from Iran); in 2015 the equivalent figure was EUR 11.8m External Income is currently projected at EUR EUR 10.1m. External Income in 2015 was EUR 9.8m. With partner payments included in 2016, external income is likely to be close to EUR 11.5m.

NMO Contributions 2016 Footnotes are not shown here, for presentation purposes (there are many footnotes, and the text becomes so small that it is no longer legible). Footnotes are: Outstanding Contributions highlighted in blue are residual amounts where partial payments have already been received The Brazilian NMO has informed IIASA that the residual amount of EUR 60,571 is expected to be settled during the course of October 2016 As discussed at a meeting involving representatives from IIASA, the US NMO and the US National Science Foundation on 13th October, payment of the 2016 Contribution has received all internal approvals Reclassification Negotiations: potential re-classification of the Chinese NMO into category B is currently under negotiation in accordance with Council Resolution 572 (ii) potential re-classification of the Russian NMO into category B is currently under negotiation in accordance with Council Resolution 572 Special Arrangements and other Notes: in accordance with Council Resolution 551, the Australian NMO will pay 50% of category C in 2014 and 2015, 75% in 2016 and 100% commencing 2017 in accordance with Council Resolution 618 from June 2015, category F was discontinued, and all members from this category - which included the Egyptian NMO - were reclassified in category E. Council Resolution 618 recognizes the ability of Council to accept partial payments during a period of transition. provision for category D, payable to and receivable by IIASA only upon resolution of legal constraints currently in place as agreed at the June 2012 Council Meeting, the category E Contribution of the Malaysian NMO will be EUR 162,000 for the period 2012 - 2016 in accordance with Council Resolution 589, the Mexican NMO will pay 100% of cat. D in 2014 and 2015, 75% in 2016, 50% in 2017 and 0% in 2018. Normal category D membership payments resume thereafter in accordance with Council Resolution 618 from June 2015, category F was discontinued, and all members from this category - which included the Pakistani NMO - were reclassified in category E. Council Resolution 618 recognizes the ability of Council to accept partial payments during a period of transition. in accordance with Council Resolution 614, the United Kingdom NMO will pay 50% of cat. B in 2015, 75% in 2016 and 2017, and 100% in 2018 and 2019. Normal category B membership payments resume thereafter the Vietnamese NMO will pay 50% of category E (at a rate of EUR 162,000) in 2015, 2016 and 2017 and 100% in 2018 * List of footnotes not included for presentation purposes. All footnotes can be found on the documents in the Council Packages

External Funding Report 2016 (forecasted)

3. Contribution Level, Category A+ ITEMS: 1. Contribution Level, Category A+  

Contribution Level, Category A+ The proposal based on the reasons put forward in the accompanying documents is as follows:   Membership Category Membership Contribution A+ € 2,800,000 B € 1,400,000 C € 700,000 D € 350,000 E € 175,000 This presentation only includes the table. The supporting document should be referred to for background information. If the Finance Committee decides to recommend that Council approves the new category A+ contribution level, then a Resolution will need to be drafted.

4. Proposed Budget 2017 ITEMS: 1. COUN-89-V: Proposed Budget 2017 2. NMO Contributions 2017  

2016 approved Budget (for Comparison) Budget Sources for 2017 Source 2017 Budget Proposal 2016 approved Budget (for Comparison) Income from NMO Contributions 13.150 12.400 External Contracts and Grants 11.000 Other Income 0.200 0.100 Movement on Reserves - In the 2017 budget proposal, this is the forecasted unused allocation from the 2016 budget 350 1.000 Total: 24.700 24.500 NMO projection of EUR 13.15m in 2017 assumes that all NMOs will be successful in paying their contributions at their current levels (the next slide shows the breakdown of this projection). It also includes category D contributions from Israel and Iran. With this in mind, it is a fairly optimistic projection. External income is forecasted at EUR 11m in 2017. This projection is consistent with the figure in 2016, and draws on multiple sources of information (e.g. contracts and grants already in the system, contracts and grants under negotiation, proposals in the system, proposals not yet in the system, intelligence gained during budget and other meetings, etc). The amount of EUR 11m includes partner payments amounting to EUR 1m. This forecast has also be subjected to rigorous plausibility checks (e.g. benchmarking with past experiences) and is considered to be robust, although it is stressed that we will need to keep Programs ‘hungry’ for external funding to achieve it. In 2016’s budget, Council approved a draw on reserves of EUR 1m. Current forecasts indicate that a large portion of this will not be needed (between EUR 300k and EUR 400k). We are therefore requesting that the unused amount (we are requesting the amount of EUR 350k) be transferred over into 2017

Direct Research Allocations 2017 Budget Proposal 2016 approved Budget (for Comparison) Scientific Research Programs 12.760 12.642 Capacity Development & Training (CDAT) - Including YSSP and IIASA Post Doc Program 0.800 0.890 Exploratory and Special Projects 0.600 0.550 Direct Research Allocations, SUBTOTAL: 14.160 14.082 Scientific Research Programs in 2015 consists of: Program Direct Net External Total ENE 0.396 0.960 1.356 AIR 0.484 0.940 1.424 ESM 0.967 4.350 5.317 WAT 0.290 0.555 0.845 EEP 0.275 0.000 0.275 RISK 0.376 0.440 0.816 POP 0.360 0.480 0.840 TNT 0.290 0.055 0.345 ASA 0.322 0.220 0.542 TOTAL 3.760 8.000 11.760 + EUR 1m partner payments = EUR 12.760

Indirect Research Allocations (1 of 2) 2017 Budget Proposal 2016 approved Budget (for Comparison) Funds for ongoing Cross Cutting Research Initiatives 0.400 0.800 Funds for Systems Analysis Forum Projects 0.175 0.250 IIASA-JRC Center for Migration 0.275 0.000 Futures Initiatives (includes Tropical Futures Initiative, Arctic Futures Initiative and Eurasian Futures Initiative) 0.450 Nexus projects (includes internal allocations for the GEF-UNIDO-IIASA project, the Nexus ++ initiative and The World In 2050 project) 1.200 0.950 Funds for ongoing Cross Cutting Research Initiatives (EUR 400k) based on following expectations: DVM (new cross cut) 150k (split between ESM, EEP and ASA) Equitable Governance of Common Goods 100k (split between RISK and EEP) Systematic Risk and Network Dynamics 150k (split between RISK, EEP and ASA) Included in the Futures Initiatives are: Arctics Tropics Eurasian Project Nexus-related activities combines GEF-UNIDO-IIASA activities, Nexus++ and TWI 2050 activities (the split of this sum is yet to be determined, although it is noted that a large share will probably be requested by the IS-WEL team)

Indirect Research Allocations (2 of 2) 2017 Budget Proposal 2016 approved Budget (for Comparison) Evaluation and Advisory Committees (includes Scientific Advisory Committee meeting, and Evaluation Committee meeting, and additionally in 2017, costs relating to the Institute Evaluation) 0.200 0.110 NMO & Community Service Fund (for supporting IIASA’s function as a major model and data repository for NMOs and other countries) 0.500 0.300 Contingency Fund 0.270 0.789 Indirect Research Allocations, SUBTOTAL: 3.420 3.649 This

2016 approved Budget (for Comparison) Scientific Services Budget Position 2017 Budget Proposal 2016 approved Budget (for Comparison) Scientific Services 2.890 2.712 Computer Hardware and General Capital 0.420 0.400 SUBTOTAL: 3.310 3.112 Scientific Services in 2017: ERCL (External Relations, Communications and Library) = KEUR 1.340 ICT = KEUR 880 50% of Directorate = KEUR 430 50% of Council & External Relations = KEUR 240 TOTAL = KEUR 2.890

2016 approved Budget (for Comparison) Infrastructure & Administration Support and Other Sundry Allocations Budget Position 2017 Budget Proposal 2016 approved Budget (for Comparison) Infrastructure & Administration Support 3.380 3.242 Maintenance and Utilities 0.430 0.415 Support Infrastructure in 2017: 50% of Director’s office = KEUR 430 Conference services = KEUR 50 50% of Council and External Relations = KEUR 235 FSR (OSR, FAB and AMA) = KEUR 1,280 HR = KEUR 430 Warehouse = KEUR 65 Transport = KEUR 30 Technical Infrastructure = KEUR 425 (maintenance and utilities for Institute listed separately this year) Domestic Services = KEUR 265 Schloss Restaurant = KEUR 110 Telecommunications = KEUR 60 TOTAL = KEUR 3.380

Budget Proposal 2017: Summary INCOME SOURCES: 2017 Budget Proposal 2016 approved Budget NMO Contributions 13.150 12.400 External Contracts & Grants 11.000 Other Income 0.200 0.100 Movement on Reserves (in 2017 transfer of unused draw of reserves from 2016) 0.350 1.000 SUBTOTAL: 24.700 24.500 ALLOCATIONS: 2017 Budget Proposal 2016 approved Budget Direct allocations to Research Programs and related scientific activities 14.160 14.082 Other Scientific Initiatives 3.420 3.649 Scientific Services, Computer Hardware and other Capital 3.310 3.112 Scientific Activities, SUBTOTAL: 20.890 20.843 Infrastructure & Administration Support 3.380 3.242 Maintenance and Utilities 0.430 0.415 TOTAL ALLOCATIONS: 24.700 24.500

5. Development and Fundraising Activities ITEMS: 1. Overview and Status Report Supporting Document: Report from the IIASA Fund Board of Directors

IlASA Fundraising Campaigns Totals raised to date:

6. Other Business