To the International Executive Council of the
International Brotherhood of Electrical Workers

We have audited the accompanying consolidated statements of financial position of the International Brotherhood of Electrical Workers and subsidiaries (collectively the “International Union”) as of June 30, 2009 and 2008, and the related consolidated statements of activities and of cash flows for the years then ended. These financial statements are the responsibility of the International Union’s management. Our responsibility is to express an opinion on these 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 an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes 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 International Union’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 financial statements, assessing the accounting principles used and significant estimates made by the International Union’s management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the International Brotherhood of Electrical Workers and subsidiaries as of June 30, 2009 and 2008, and the consolidated changes in their net assets and their consolidated cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Washington, DC
September 9, 2009

During the year ended June 30, 2009, the International Union adopted Statement of Financial Accounting Standards No. 157, Fair Value Measurements. For assets and liabilities measured at fair value on a recurring basis during the period, this Statement requires quantitative disclosures about fair value measurements separately for each major category of assets and liabilities. This standard clarifies the definition of fair value for financial reporting, establishes a hierarchal disclosure framework for measuring fair value and requires additional disclosures about the use of fair value measurements.

The three levels of the fair value hierarchy under FAS 157, and their applicability to the International Union’s investments, are described below:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Quoted prices for similar assets or liabilities, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 2 includes investments valued at quoted prices adjusted for legal or contractual restrictions specific to the security.

Level 3 – Pricing inputs are unobservable for the asset or liability, that is, inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Level 3 includes private portfolio investments that are supported by little or no market activity.

The adoption of FAS 157 did not have a material impact on the International Union’s financial statements.

The following is a summary of the inputs used as of June 30, 2009, in valuing investments carried at fair value:

Net losses (realized and unrealized) reported above are included in net depreciation in fair value of investments on the statement of activities for the year ended June 30, 2009. The amount of the net losses related to investments held at June 30, 2009 was $3,747,400.

Note 4. Securities Lending Program

The International Union has entered into an agreement with the bank that acts as custodian for the International Union’s investments which authorizes the bank to lend securities held in the International Union’s accounts to third parties.

The International Union receives 70% of the net revenue derived from the securities lending activities, and the bank receives the remainder of the net revenue. “Interest” reported in the consolidated statements of activities includes $125,478 and $109,823 earned by the International Union during the years ended June 30, 2009 and 2008, respectively, in connection with the securities lending program.

Under this program, the bank must obtain collateral from the borrower in the form of cash, letters of credit issued by an entity other than the borrower, or acceptable securities. Both the collateral and the securities loaned are marked-to-market on a daily basis so that all loaned securities are fully collateralized at all times. In the event that the loaned securities are not returned by the borrower, the bank will, at its own expense, either replace the loaned securities or, if unable to purchase those securities on the open market, credit the International Union’s accounts with cash equal to the fair value of the loaned securities.

The International Union’s securities lending activities are collateralized as described above, and the terms of the securities lending agreement with the custodial bank require the bank to comply with government rules and regulations related to the lending of securities; however, the securities lending program involves both market and credit risk. In this context, market risk refers to the possibility that the borrower of securities will be unable to collateralize the loan upon a sudden material change in the fair value of the loaned securities or the collateral, or that the bank’s investment of cash collateral received from the borrowers of the International Union’s securities may be subject to unfavorable market fluctuations. Credit risk refers to the possibility that counterparties involved in the securities lending program may fail to perform in accordance with the terms of their contracts. To date, the International Union has experienced no realized losses in connection with the securities lending program. At June 30, 2009 and 2008, the fair value of the collateral held was as follows:

The fair value of securities loaned was $15,052,248 and $12,345,113, respectively. In accordance with Statement of Financial Accounting Standards No. 140 the value of the cash collateral held and a corresponding liability to return the collateral have been reported in the accompanying statements of financial position.

Note 5. Pension Plans

The International Union maintains two defined benefit pension plans to cover all of its employees. There are no employee contributions and all employer contributions to the plans are based on actuarial costs as calculated by the actuary. The actuarial valuations are based on the projected benefit method with aggregate level normal cost and frozen initial liability.

The annual measurement date is June 30. The net periodic pension cost for the plans for the years ended June 30, 2009 and 2008 is summarized as follows:

The expected long-term rate of return on plan assets of 7% reflects the average rate of earnings expected on plan assets invested or to be invested to provide for the benefits included in the benefit obligations. The assumption has been determined by reflecting expectations regarding future rates of return for plan investments, with consideration given to the distribution of investments by asset class and historical rates of return for each individual asset class.

Total pension plan weighted-average asset allocations at June 30, 2009 and 2008, by asset category, are as follows:

The plans’ investment strategies are based on an expectation that equity securities will outperform debt securities over the long term, and that the plans should maximize investment return while minimizing investment risk through appropriate portfolio diversification. All investments are actively managed by a diversified group of professional investment managers, whose performance is routinely evaluated by a professional investment consultant. Target allocation percentages are 60% for equities, 25% for fixed income securities, 10% for real estate, and 5% for other investments (principally limited partnerships).

The International Union also contributes to a multiemployer defined benefit plan on behalf of its employees. Contributions to this plan were $832,722 and $774,937 for the years ended June 30, 2009 and 2008, respectively.

Note 6. Postretirement Benefits

In addition to providing pension benefits, the International Union provides certain health care, life insurance and legal benefits for substantially all employees who reach normal retirement age while working for the International Union.

Postretirement benefit costs for the years ended June 30, 2009 and 2008 include the following components:

The accumulated postretirement benefit obligation and funded status at June 30, 2009 and 2008 are as follows:

The above postretirement benefit cost does not represent the actual amount paid (net of estimated Medicare Part D subsidies) of $6,644,000 and $5,702,692 for the years ended June 30, 2009 and 2008, respectively. The net actuarial loss that will be amortized from unrestricted net assets into net periodic benefit cost during 2010 is $8,009,867.

Weighted-average assumptions used to determine net postretirement benefit cost at beginning of year:

Weighted-average assumptions used to determine benefit obligations at end of year:

The assumed health care cost trend rates used to measure the expected cost of benefits for the year ended June 30, 2009, were assumed to increase by 10% for medical, 9% for drugs, 9% for Medicare Part D subsidy, 5% for dental/vision, 6% for Medicare Part B premiums, and 3% for legal costs. Thereafter, rates for increases in medical, drug costs and the Medicare Part D subsidy were assumed to gradually decrease until they reach 5% in 2023.

Total expected benefit payments, net of Medicare Part D subsidies, for the next 10 fiscal years are as follows:

The International Union appropriated investments of $153,060,555 at June 30, 2009 to pay for future postretirement benefit costs.

Note 7. Mortgages Payable

The IBEW Headquarters Building LLC (the “Company”) has two mortgages payable, $40 million to Massachusetts Mutual Life Insurance Company and $40 million to New York Life Insurance Company, secured by substantially all of the Company’s assets. The mortgage loans bear interest at an annual rate of 5.63% and are payable in monthly installments of principal and interest totaling $529,108, and mature on July 1, 2019, at which time the remaining principal and interest amounts of $37,191,698 are due in full. Future minimum payments on the mortgage obligations are due as follows:

Note 8. Royalty Income

The International Union has entered into a multi-year License Agreement and a List Use Agreement with the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) under which the AFL-CIO has obtained rights to use certain intangible property belonging to the International Union, including the rights to use the name, logo, trademarks and membership lists of the International Union, in exchange for specified royalty payments to be paid to the International Union by the AFL-CIO. In turn, the AFL-CIO has sub-licensed the rights to use the International Union intangible property to Household Bank Nevada, N.A., for use by the bank in connection with its marketing of credit card and certain other financial products to members of the International Union. These agreements commenced on March 1, 1997.

For the years ended June 30, 2009 and 2008 the International Union recognized as revenue $2,673,447 and $1,497,401, respectively.

Note 9. Functional Expenses

The financial statements are prepared in accordance with the provisions of Statement of Financial Accounting Standards No. 117, Financial Statements of Not-for-Profit Organizations (Statement No. 117). Statement No. 117 establishes standards for general purpose, external financial statements of financial position, activities and cash flows. It requires that the International Union’s net assets and its revenues, expenses, gains and losses be classified between unrestricted, temporarily restricted, and permanently restricted based on the existence or absence of donor imposed restrictions. For the years ended June 30, 2009 and 2008 all of the net assets and activities of the International Union were classified as unrestricted due to the nonexistence of donor imposed restrictions. Statement 117 also requires that the International Union expenses be classified on a functional basis, that is, expenses broken down into classifications that reflect the purpose (or function) of the major services and activities conducted by the International Union.

Note 10. Litigation

The International Union is a party to a number of routine lawsuits, some involving substantial amounts. In all of the cases, the complaint is filed for damages against the International Union and one or more of its affiliated local unions. The General Counsel is of the opinion that these cases should be resolved without a material adverse effect on the financial condition of the International Union.

Note 11. Related Party Transactions

The IBEW provides certain administrative services to the International Brotherhood of Electrical Workers’ Pension Benefit Fund (Fund), for which the International Union is reimbursed. These services include salaries and benefits, rent, computer systems, and other administrative services. The amount reimbursed totaled $3,175,000 and $2,650,000, for the years ended June 30, 2009 and 2008, respectively.

In addition, the International Union collects and remits contributions received on behalf of the Fund from members.

The International Union also pays administrative services on behalf of the Pension Plan for the International Officers, Representatives and Assistants of the International Brotherhood of Electrical Workers, and the Pension Plan for Office Employees of the International Brotherhood of Electrical Workers. The administrative services include auditing, legal and actuarial services. The costs of the administrative services are not readily determinable.

Note 12. Operating Leases

The International Union, through its wholly-owned subsidiary IBEW Headquarters Building, LLC, has entered into agreements to lease space in its building. These leases, which expire at various dates through 2025, contain renewal options. Future minimum rental payments, excluding the lease payments due from the International Union, due under these agreements over the next five fiscal years are as follows:

Note 13. Risks and Uncertainties

The International Union invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statement of financial position.