Stevens Institute of Technology

Castle Point on Hudson

201•216•5000 • www.stevens.edu

Hoboken, NJ 07030 USA

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“Clearly, the Stevensmission for education and research is going forward with tremendousenergy and a vision thatlooks beyond the near horizon.”

Chairman Lawrence T. Babbio, Jr.

“Stevens Institute ofTechnology is on anupward trajectory,and its destination isamong the very bestresearch institutionsin the United Statesand the world.”

President Harold J. Raveché

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2 Message from the President 3 Message from the Chairman

4 A NEW POINT ON HUDSON• Stevens Launches Balloons for Homeland Security• Old Schooner With High-Tech Sensors Protects NY Harbor • SINTEL Draws on Interdisciplinary Research to Guard Against

Threats• Attila Technologies is Latest WinSec Success Story• Center for Environmental Systems’ Surface,

Water Decontamination• Howe School Efforts are Bearing Fruit• Biz Tech Graduates Attract Attention

26 IT TAKES AN INTERDISCIPLINARY TEAM TO SOLVE TODAY’S PROBLEMS• Center Delves Into Decision Making Process• Uniting to Battle for Cybersecurity • Systems Engineering Program is Largest• Undergraduate Engineering Aims to be More Flexible• Big Steps in Nanotechnology

38 MAKING OUR PRESENCE KNOWN, ON THE GROUND AND THE WEB• Stevens Makes Its Mark in China

40 STEVENS STUDENTS STAND OUT AS ACHIEVERS AND LEADERS• Institute Marks Graduation Milestone• Athletics Program has Standout Year• Year of External Recognition• Feeling the Pain with Team MeCCo• Research, Awards and Achievements• New Faculty• An Incubator Company Grows Up• New Leadership• Development and Facilities• Faculty Profiles

52 2005 CONSOLIDATED FINANCIAL STATEMENTS• Report of the Treasurer and Chief Financial Officer

ANNUAL REPORT 2004-2005

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cover: New Babbio Center looks out onto an interconnected world.

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C H A I R M A N L A W R E N C E T . B A B B I O , J R .

The Stevens Board of Trustees’ responsibilities includeevaluating opportunities for growth and, together withcampus leadership, charting a path that keeps Stevenscompetitive and ensures our ability to continue to edu-cate top students for promising careers.

A decade ago, we recognized that unless we couldstrategically grow Stevens, our ability to continue as asource of excellence in research and education would beseverely hampered. To a large degree, that meantinvesting in our physical facilities and infrastructure.

The new and renovated facilities include a dozenundergraduate engineering labs; the Center for MaritimeSystems and the rebuilt Davidson Lab; major new athlet-ics facilities, coaches and training personnel, resulting ina meteoric rise for Stevens teams in the NCAA Division IIIranks; new research centers focused on technologyproblems in national security; new student dorms toaccommodate the growing population; and The BabbioCenter for Technology Management, which will house theadministrative center of The Wesley J. Howe School andlaunch the next phase of growth for our managementprograms. Faculty in the three schools increased by one-third during this time to build upon specific, strategicareas of our strength.

The Institute has a long tradition of innovation andexcellence. It stands at the forefront of engineering,technology advancement and scientific accomplish-ments; but we must continue to grow in order to competeand keep pace with changes around us.

It is impossible to get ahead – and stay ahead – bystanding still. Further progress will ensure that currentstudents – as well as future incoming classes – receivethe highest quality education, and are fully prepared asthey begin their careers. Institutional success will enablefuture alumni to continue the Stevens tradition of lead-ership in the competitive global workforce.

During years that witnessed the dot-com implosion,the 9/11 attacks, and a jolted and slowly recovering USeconomy, Stevens has sought to fulfill its stated goals

for achieving prominence and garnering a deserved rep-utation as a national – and global – asset. During thistime, many alumni and friends made gifts of significanceto help us move forward.

Two back-to-back, five-year capital campaigns sethigh goals for modernization of facilities and growth.Stevens now boasts academic and research faculty thatare competitive with the nation’s finest. Private philan-thropy at Stevens continues to grow in support of thesenew programs and facilities.

The initiative to grow the student body has paid offhandsomely, too, with aggressive recruiting of new andbetter-prepared constituencies at both the undergrad-uate and graduate levels.

Achieving these goals required major investmentsand unprecedented fund-raising efforts. As a result, thequality of an education at Stevens has not gone unno-ticed: The number of undergraduate applications hasincreased more than 26 percent in 10 years. And we havebecome increasingly selective: Improving from 71 percentto 49 percent over this same 10 year period. In addition,even more students are applying for early-decision.Between 1995 and 2005, Stevens’ overall undergraduateenrollment has climbed nearly 37.5 percent.

Our graduate programs are not only prominent region-ally, but also globally. The Information Systems and SystemsEngineering programs are among the largest and finest inthe world. WebCampus.Stevens now reaches 43 states and40 countries and was named among the best online gradu-ate programs in 2005 by the US Distance LearningAssociation, having been similarly recognized in 2003 by theAlfred P. Sloan Foundation. In 2005, Stevens awarded 848master’s degrees, one of the largest classes ever.

Clearly, the Stevens mission for education andresearch is going forward with tremendous energy and avision that looks beyond the near horizon. When readingthese pages, I am certain that you will be infused withthis sense of the Institute’s mission and the spirit thatdrives it.

Message from the Chairman

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The important work of our faculty, the impressiveachievements of our students, the professional dedi-cation of our staff, and the exemplary commitment ofour alumni have all contributed to a most successful2004-05 academic year. I am honored to serve as pres-ident at this exciting time in the ascent of Stevensamong the nation’s top research universities. I am

especially proud of those extraordinary individu-als that contribute to our campus as adynamically vibrant center for learning andcreative activities.

Sponsored research of the faculty con-tinued to grow in the 2004-05 academicyear, reflecting the recognition of the schol-

arly work of the Institute’s faculty among gov-ernment agencies, private foundations and

industry. It is a privilege to beassociated with these out-standing faculty who are pio-neers in their fields ofresearch and who are con-tributing, through their

research, to the rapid ascentof the Institute among the

nation’s top universities. In the recent US

News & World Reportrankings for national

universities, Stevensclimbed ten positions to

#71 - rising farther, faster, thanany other university in the

National Top 100. In 2005,retention and graduation

improved significantly, con-tributing to the higher standing.

Stevens is now, in the category of ActualGraduation, ranked 58, up from 83 in 2004. Ranked39th in SATs, Stevens continues to attract the mosttalented students in the nation.

Our collective goal is to continue to nurture theInstitute’s distinct educational and research envi-ronment.

Technogenesis® cultivates that high degree ofinventiveness which enables faculty and students toconnect the pioneering progress they achieve in theirfields with products and services that are valued bybusiness, industry and society as a whole. In the yearjust passed, Technogenesis has shown its value-added impact for our students, faculty, industry part-ners, the Institute itself, and the world at large. It is noaccident that Stevens was ranked in late 2004 by ThePrinceton Review as standing among the nation’s“most entrepreneurial campuses.”

Students and young alumni continued to apply forpatents in technology applications that they helpedto create through the Senior Design andTechnogenesis Scholars programs. Impressively, onebiomedical device for detecting sources of pain in thebody is expected shortly to undergo clinical trials at aNew York City medical center.

The culture of the Scholar-Athlete at Stevens con-tinued to expand and acquire new dimensionalities,as our academically outstanding Division III athletesexperienced their most successful season ever, with afirst-year student bringing home Stevens’ firstNational Championship in Equestrian Competition.

As a testimony to our alumni, annual giving toStevens reached new highs, with the Edwin A. StevensSociety breaking the 500-member barrier for the firsttime in its history.

Stevens Institute of Technology is on an upwardtrajectory, and its destination is among the very bestresearch institutions in the United States and theworld.

P R E S I D E N T H A R O L D J . R A V E C H É

Message from the President

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“Stevens knowsbusiness andtechnology.That is our‘secretweapon.’ We’restriving to beseen as thetechnical university ofchoice forbusiness andindustry.”

–President Harold J. Raveché

A New Point on Hudson

From the countless windows ofthe skyscrapers of Manhattan,the view of Stevens has changed.The red brick of our heritage isstill visible, as is the squaresolidity of The Howe Center. Thebluff of gray stone on whichStevens is situated remains unal-tered. Anchored in that bedrock,however, is a new structure whichcommands the attention of thecity, the harbor and the world in away no previous building has: TheLawrence T. Babbio, Jr. Center forTechnology Management.

The six-story, 95,000 squarefoot Babbio Center is a beacon,signaling the resolve of Stevens’students, faculty and adminis-trators to meet the needs of the wider world withresearch and leadership. As the new headquartersof The Wesley J. Howe School of TechnologyManagement, it is a glass-and-steel symbol of theInstitute’s commitment to “excellence for a pur-pose,” in the words of President Harold J. Raveché,“a place where we can tailor and customize pro-grams, where faculty members can work togetherin an interdisciplinary fashion. In today’s integrat-ed and highly competitive world, they can’t juststay in one field.”

Stevens marked the official dedication of thecenter on historic Castle Point on October 7 & 8with an invitation-only gala and alumni receptionhonoring the building’s benefactor and champion,Lawrence T. Babbio, Jr., Class of 1966 and Chairman of Stevens’ Board of Trustees. The

occasion was capped with the convening of two expert panels that considered TechnologyConvergence in Security andTelecommunications, the firstof what Stevens expects will bemany such high-level events atThe Babbio Center. The keynotespeaker was Pat Russo, CEO ofLucent Technologies.

It’s especially fitting thatthe new building houses TheHowe School, notes PresidentRaveché, because “Stevensknows business and technology.That is our ‘secret weapon.’ We’restriving to be seen as the techni-cal university of choice for busi-ness and industry.”

At The Howe School in The Babbio Center,Stevens’ dedication to meeting the needs of anever-more-complex world will be realized with thecultivation of leaders able to mesh diverse disci-plines successfully to achieve solutions to prob-lems in homeland security, health care, the envi-ronment and other critical areas.

This is the dynamic environment described asTechnogenesis®, the educational frontier where fac-ulty and students work with colleagues in industryand government to nurture the conception, designand marketplace realization of new technologies.

The melding of Technogenesis with the mis-sion of The Babbio Center enables StevensInstitute to chart a new direction in the twenty-first century and to add another dimension to thestructure of higher education.

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The six-story, 95,000 square foot Babbio Center is a beacon,signaling Stevens’ resolve to meet the needs of the wider worldwith education and research leadership. As the new headquartersof The Wesley J. Howe School of Technology Management, it is aglass-and-steel symbol of the Institute’s commitment to “excellence for a purpose,” in the words of President Harold J.Raveché, “a place where we can tailor and customize programs,where faculty members can work together in an interdisciplinaryfashion. In today’s integrated and highly competitive world, theycan’t just stay in one field.”

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Stevens Launches Balloons for Homeland Security

“The goal is tomake a modelof where thegas is going to go.”

– Dr. Alan F. Blumberg

Balloons wafting on an August breeze against thebackdrop of Midtown Manhattan may not bring tomind serious research to protect US homelandsecurity. But the “Urban Dispersion Program” is justone of the latest – and most visible – of many proj-ects Stevens has designed for that purpose.

And, in spite of its serious intent, “We’re havinga lot of fun with this project,” says Dr. Alan F.Blumberg, director of the Department of Civil,Environmental and Ocean Engineering.

With funding from the US Department ofHomeland Security and the US Defense ThreatReduction Agency, and support from the New YorkCity Office of Emergency Management, non-toxicperfluorocarbon tracer gases were released in aseries of tests in Manhattan. “Then, about 150 peo-ple with backpacks with sensors measured wherethe gas went.” Blumberg says. In addition, sensorswere posted on city streets.

Blumberg and colleagues Larry Berg fromPacific Northwest National Laboratory and Richard

Coulter from Argonne National Laboratory alsodeployed a radar wind profiler from the Stevenscampus and used Stevens as a launch site for free-flying balloon-borne instrument packages calledradiosondes. The Stevens site was selected not onlybecause of its location west of Manhattan but alsobecause of the Institute’s role in meteorologicalmodeling.

“We released weather balloons on the Stevenscampus to measure wind speed and direction fromthe surface up to about seven miles. We measuredthe temperature of the air, humidity, pressure, anddew point. So when we study the gas data, we’llhave an idea of the forces that pushed the gas. Thegoal is to make a model of where the gas is going togo. The data comes in in realtime,” Blumberg says. All thisallows researchers to project whatmight occur if terrorists releasedtoxins into the air.

The Urban Dispersion Program is just

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Dr. Alan F. Blumberg (above)and colleagues launchinstrument packetsattached to weatherballoons as part of the

“Urban DispersionProgram,” August 2005.

one of many “targeted research programs focusedon key elements of homeland protection and secu-rity,” notes Dr. George P. Korfiatis, dean of TheCharles V. Schaefer, Jr. School of Engineering.

These high-tech applications for homelandsecurity and defense have been of particular inter-est to government science and technology agen-cies, adds Dr. Helena Wisniewski, vice president foruniversity research and enterprise development.“Our highly developed expertise in computer sci-ence and engineering, maritime systems, systemsengineering and nanoscale technologies has

resulted in major growth offunded research.”

Wisniewski is wellon the way to hergoal of ensuringthat Stevens is

recognized as anational resource,

sought after by gov-ernment and industry for

its extraordi-nary research,t e c h n o l o g yand entrepre-neurial vision.She reports thatFY 2005 researchexpenditures werenearly triple those of FY2000 – boding well forloftier future targets.

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“Stevens hasbecome a national leader in the development of sensor technologies and data analysis and integration.”

– Dr. Michael S. Bruno

A 120-year-old schooner has been pressed into serviceto study and protect New York area waterways. Theship, the Pioneer, now carries the latest technology inthe form of a computerized water monitoring system aspart of the Urban Ocean Observatory/NYHOPS.

In partnership with the New York Department ofEnvironmental Protection, the system measures watertemperature, salinity and dissolved oxygen in New YorkHarbor from the Pioneer as it conducts its public sails.The data is fed via a wireless network to CMS computers.

The CMS is playing a leading role in this area, accord-ing to Dr. Michael S. Bruno. “Stevens has become anational leader in the development of sensor technolo-

gies and data analysis and integration – data fusion withthe purpose of enhancing maritime security.”

The new partnership between Stevens and SouthStreet Seaport Museum, which owns the ship, isideal, Bruno says, “because the museum is focusedon education, and the Stevens instrumentationprovides a direct connection between the vessels

and the environmental monitoring being done bythe scientific community. Students can go homeand see the state of the water, plot trends and stayin touch with the water even when they’re not phys-ically, literally at the water’s edge.”

A June voyage that set sail from South StreetSeaport on the Pioneer celebrated this new tech-nology/education partnership.

The Urban Ocean Observatory/NYHOPS is builtaround three main components: observations,numerical modeling, and information distribution.The observation system consists of in situ measure-ments that are acquired in real-time to provide

knowledge of present conditions and todirectly support the modeling effort. Stevenshas formed a partnership with the US Navy,the National Oceanic and AtmosphericAdministration and state agencies to createa modeling/observation system that func-tions as both an operational product and aresearch tool. The Department of HomelandSecurity is also working with the experts inthe NYHOPS program to study the tracking ofpotential hazardous agents released in theNew York and New Jersey urban environment.

This comparatively new research fieldknown as operational oceanography bringstogether expertise in ocean physics, coastalengineering and computer science, ProfessorAlan Blumberg explains. “Real-time oceano-

graphic information within New York Harbor is obtainedusing various sensors placed at strategic locations tomonitor the current state of the estuarine environment.”

In addition to the Pioneer, these locationsinclude shore, offshore mooring and commuter-ferry-based conductivity and temperature sensors.“All of the sensors transmit their data in real-time,

Old Schooner with High-Tech Sensors Protects New York Harbor

wirelessly via cellular connections to the Stevensoceanographic and meteorological data repository;they are then assimilated into the operational fore-casting data stream,” according to Blumberg. Themodeling system consists of a three-dimensionalcirculation model, an atmospheric model and awave model. It is designed to provide reliable andtimely meteorological and oceanographic “now-casts” and forecasts for the New York Harbor region.

Stevens also has become a key player in devel-oping the Integrated Ocean Observing System, whichis directed through the National Oceanic andAtmospheric Administration.

“We have a system of weather sensors acrossthe United States and we hope to have similarability in coastal ocean and estuaries,” Brunosays. Such a system could warn of tsunamis, pro-vide maritime security and pollution data.

Several observatories are already in place, he adds,along the New Jersey coast and in New York Harbor.

“Plus,” says Bruno, “we have an exciting interna-tional project, ACCESS – the Atlantic Center for theInnovation, Design and Control of Small Ships – which isbeing funded by the Navy” says Bruno. This joint projectwith the Office of Naval Research is developing tech-nology to identify and track small vessels and predictwhether such vessels pose a threat.

All these efforts involve experts from a variety ofdisciplines. “These projects are trans-disciplinarybecause some of what we are trying to develop does notexist in any one discipline. We are almost creating newdisciplines that draw on the expertise” of professorsand students throughout Stevens, Bruno says. “Theredoes not exist a realistic laboratory in which one candevelop and test maritime security technology; but wehave at our doorstep the laboratory right here – one ofthe busiest harbors in world.”

Davidson Lab Still MakingWaves in Ship Design

“Designing small, high-speedships is what Davidson Lab isfamous for,” Professor Blumbergnotes.

Stevens’ ship design facilitieshave come a long way since 1931,when small models were tested ina 60-foot swimming pool on campus. The Institute isnearing completion of a major renovation of DavidsonLab’s high speed towing tank. The original tank was builtduring World War II, “and had not been touched since,”according to Bruno. This undertaking increases the sizeof the tank, nearly doubling its cross-sectional area,and enhances its electronics and instrumentation.Originally 313 feet long, 12 feet wide and 6 feet deep, itwill be 320 feet long, 16 feet wide and 8 feet deep.

An important aim of the renovation is to allow moreaccess for classroom instruction and outreach, Brunosays, because “if we are really serious about producingthe next generation of ship designers it has to startfrom an early age.” To encourage the next generationCMS now works with the Center for Improved Scienceand Engineering Education. “We have found the oceanis a very powerful vehicle for inspiring youngsters inmath and science,” Bruno says.

Stevens is also building the curricula and partner-ships to create the next generation of Navy ship design-ers, he says. “We’re developing the knowledge and toolsthat will lead to real, radical innovation in ship design.”

Stevens also has created a new program – theNaval Engineering Program – and has just accepted thefirst class. “We have an exchange agreement with TheUniversity College London and welcomed the first twostudents in August,” Bruno says.

Clockwise from above:The Davidson Lab towingtank in the 1970’s;Pioneer crewmembers;(left to right) Dr. MichaelS. Bruno, Dov Kruger, Dr.George P. Korfiatis,Howie Goheen, BrianFullerton and DouglasMeding.

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SINTEL Draws on Interdisciplinary Research toGuard Against Threats

Argus, a monster in Greek mythology, had many eyes,making it the almost-perfect guard creature. Stevenshas brought together its wealth of research resources toform the Secure Infrastructure Technology Laboratory(SINTEL), a many-faceted guard to protect against ter-rorist threats at home and abroad.

The unique research facility debuted in July with theannouncement of an initial grant of $6.8 million fromthe US Office of Naval Research (ONR). An additional $6million is earmarked for FY 2006.

President Raveché sees SINTEL as “a synthesis andexpansion of Stevens’ already vast expertise in the areaof homeland security technologies. It will serve theneeds of the US Navy and others by leveraging severalexisting research centers, which are already engaged inNaval Anti-Terrorism and Force Protection work, as wellas infrastructure security research.”

Those existing research centers at Stevens include:

• The Center for Maritime Systems

• The Urban Ocean Observatory/New York Harbor Observing and Prediction Center (NYHOPS)

• The Design and Manufacturing Institute (DMI)

• The Wireless Network Security Center (WiNSeC)

“SINTEL is an interdisciplinary laboratory for real-time systems development for the protection ofmaritime infrastructure. It tests and analyzes threat scenarios in the realistic environment of the NewYork Harbor,” says Wisniewski, to whom the director of SINTEL reports. “The goal is to provide eachmember of the ship’s crew with automated, real-time situational information for the entire ship, in ahand held device. This information includes threat assessment and automated decision aides.”

Protection of Naval infrastructure against terrorist attack is extremely critical, she continues.

“Defending against the asymmetric threats to our Navyforces at home and abroad constitutes the primaryresearch, modeling and development business of SIN-TEL.” The benefits of SINTEL include automated deci-sion aids providing rapid responses to threats and thecapability to act prior to attack; sensor placementoptimization; and the ability to monitor and determine threats in a foreign or home port.An imagery sensor modeling system will be able toresolve small-scale surface ocean motions and toprovide bottom topography – providing force pro-tection and situation awareness.

SINTEL’s applications include effective solutions toenvironment surveillance, data management, decisionsupport and latency problems. It will provide knowl-edge of bottom topography from underwaterautonomous vehicles, small planes or other platformsfor force protection and situation awareness thatwould be difficult or impossible to acquire with meth-

ods currently available.“To achieve our goal we will take advantage of our

realistic maritime environment, and develop systemswhich integrate real-time mobile and remote oceansensor capability, ocean forecast models, wireless net-working, and automated decision aids; and advancedhuman/computer interfaces will provide a secureinfrastructure technology research and developmententerprise unequaled in the United States,” says Dr.Michael S. Bruno, who co-founded SINTEL and will serveas SINTEL’s interim director. Bruno is also a professorand director of the Center for Maritime Systems, whichhouses the historic Davidson Laboratory.

Stevens is located on theedge of the world’s greatest port security lab– New York Harbor.Bottom: The renovation ofthe Davidson Towing Tankin progress.

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“The two mostimportant problems faced byfirst responders are continuous communicationsand interoperability.”

– Vice President Helena S. Wisniewski

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Above, left to right:President Raveché, Dr. White, Vice PresidentWisniewski and Stevensgraduate students discussthe Attila radio prototype.

Far left:Close-up of an Attila radioprototype.

Attila Technologies is Latest WiNSeC Success Story

Attila Technologies LLC, a Stevens Technogenesis Company, was launched inJuly by Vice President Helena S. Wisniewski to meet the vital needs of firstresponders in emergency situations. Attila Technologies is a wireless commu-nications company that provides continuous broadband, on-demand commu-nication devices and services that function despite saturated airways.

Attila’s technology is critical to developing a communication systemthat cannot be interrupted, or jammed, resulting in ultra-reliable, high-speed communications. Attila’s products are based on patent-pending,

breakthrough technology that was developed at WiNSeC by Dr. Patrick E. White, director of WiNSeC,and researcher Nicholas Girard, with funding from the National Science Foundation. White and Girardare co-founders of Attila.

John E. Bischoff, the former vice president of operations and finance of AOL, was named firstCEO of Attila Technologies. Before joining AOL in the early days of the company, Bischoff had longexperience at IBM. He also served a stint with a successful start-up company, Aurora Biometrics,where he acted as COO during the start-up phase and served on the board for more than two years.Wisniewski serves as Attila’s chairman of the board.

The new company’s initial market will be first responders, because Attila solves “the twomost important problemsfaced by first respondersin a disaster, as stated bythe Department of HomelandSecurity – continuous com-munications and interoper-ability,” Wisniewski says.Interoperability is a criticalneed in a disaster situationbecause it provides the abil-ity to interconnect diversefirst-responder groups suchas federal, state and localagencies, police depart-ments and fire depart-ments that are takingaction during major emer-

gencies. Until now, in situations such as the9/11 terrorist attacks and the hurricane inNew Orleans, this has proved a critical short-coming.

“Additional applications of Attila includedelivery of high resolution mug shots topatrol cars operating in the field, or trans-mission of crime-scene videos to headquar-ters command centers,” White says. “Both canbe done efficiently and at low cost withouthaving to build an entirely new infrastruc-ture.”

Raveché praises “Attila’s dynamic trans-mission security, which also prevents jam-ming and eavesdropping, making it ideal for

the military market.” For the military appli-cation, the Attila radio will enable front-linetroops reliably to receive and deliver high-resolution situational awareness data.

“Looking to the future,” Wisniewski says,“Attila has the capability to provide high-speed Internet access to users, thus turningwherever they are into a virtual hot spot.”

Stevens has become established as amajor center for research on cognitive radio,White adds, noting, “We have gotten moregrants in this area from the National ScienceFoundation than any other school.” This pastyear WiNSeC received its fourth straight grantfrom NSF.

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The Center for Environmental Systems (CES) isexploring new surface and water decontami-nation projects. The CES’s multifacetedresearch covers topics ranging from wastetreatment processes, ground-water modelingand remediation, and monitoring of contami-nants in inland and coastal waters, to resi-dential water conservation, flushability anddrinking water safety.

The center is working with the US Air Forceto find ways to use di-electric barrier dis-

charge short pulses that generate chemicalradicals and ultraviolet radiation for sterili-zation and surface decontamination, says Dr. Kurt Becker, director, Physics andEngineering Physics, and associate directorfor CES. Becker is working on the project withresearch professor Dr. Abe Belkind.

The two also have been working withPicatinny Arsenal on water disinfection usingpulse electrical discharge. Water can be dis-infected by bubbling ozone through it instead

Center for Environmental Systems’ Surface andWater Decontamination

Above: Experiments in

progress. Left: The

James C. Nicoll

Environmental Lab.

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of using chlorine. But “the prob-lem with ozone is that it has to begenerated one place, then trans-ported and stored. We’re trying togenerate ozone on demand, insitu, right in the water where it isneeded,” Becker says.

This process can be used forchemical and biological decont-amination of water. In principleit might be used to clean the

family swimming pool,“but I’d advise againstit,” Becker says.

“We’re not trying to replace largetreatment plants; these could becomeportable units,” he says. The goal is“to size it down, not scale it up.”

This project fits nicely into theTechnogenesis model, he adds,

because the initial scientific concept isbeing nurtured by faculty, students andindustry and the technology is being trans-formed into a product that can be patentedand eventually sold.

responsibilities and project oversight, mainly in thefield of telecommunications. Prior to joiningStevens last year McCusker served as professionalservices vice president/ general manager at AT&TLaboratories. He oversaw the day-to-day opera-tions of the internal consulting practice of 450technical professionals, providing a wide range ofconsulting services to the organization.

Among the school’s other accomplishments,“we created a different kind of MBA,” he says. Theexecutive master of technology managementdegree went from “being a glimmer in someone’seye to graduates in two and a half years,” showingStevens’ agility and ability to respond to marketneeds.

Stevens also has established three new

research centers through TheHowe School:

• The Center for DecisionTechnologies (see page 20),which explores new ways to aidhuman decision making.

• The SAP/IDS Scheer Centerof Excellence in Business Process Innovation focus-es on how technology can help redesign businessprocesses and how business processes can be man-aged using technology.

• The Center for Technology Management forGlobal Development analyzes the intersection ofglobal development and technology management.

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The HoweSchool wascited amongthe world’selite researchinstitutions inmanagementof technology.

The Wesley J. Howe School of TechnologyManagement’s efforts to educate technology man-agers to lead and innovate in business in the UnitedStates and around the globe are bearing fruit forthe school itself, for its students and for the busi-ness community at large.

Seven years after the school was started, Lex

McCusker, acting dean of The Howe School, sees amaturing of the program and recognition by busi-nesses that The Howe School’s innovative approachis well suited to their needs.

“The school now has a national reputation.Business knows that Stevens is the place to turn.We’re quick, responsive. Whatever is hot in industry,

we have an offering,” hesays. “Technology ischanging everything.Exploit technology,” isMcCusker’s motto.

It has been a year ofexternal recognition for TheHowe School, one in whichthe school has receivednumerous high-level awards(see page 34). Among those,The Howe School was citedamong the “World’s EliteResearch Institutions inManagement of Technology.”

This, McCusker says, isthe capstone in Stevens’continuing mission, “tocarry the school’s visionsand offerings to anexpanding global audience,to nations that activelyseek new ways to managethe ever-changing technol-ogy landscape to the bene-fit of all members of socie-ty.”

McCusker himself has along history of high-leveltechnology management

Howe School Efforts are Bearing Fruit

Deluxe, highly-networkedlecture halls, equipped formultimedia instruction,distinguish The BabbioCenter for TechnologyManagement.

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“Students learnall the piecesof a companyand actuallywrite a business plan.They really seehow the piecescome together.”

– Associate Dean Louis F. Laucirica(right)

The Howe School’sBusiness and Technologyundergraduate programcontinues to bear fruitas well, graduating itssecond class and estab-lishing its graduates assought after in the marketplace.

“Nationally, thestarting salaries of busi-

ness majors tend to be considerably less than thoseof engineering and science graduates. However, atStevens they are very much on par with engineeringand computer science majors, given an averagestarting salary of $54,000,” says Louis F. Laucirica,associate dean and director of undergraduatestudies in The Howe School. In fact, Lauciricanotes, a Business and Technology graduate in theClass of 2005 (who earned a concurrent master’sdegree) received an offer package that included asigning bonus and totaled $80,000.

“These new graduates are valuable becausethey combine technical knowledge with a broad-minded approach to business management; they’reable to bridge the critical gap between businessand technology in today’s highly competitiveworld,” he says.

The program is made of up 20 percent “techies”and 80 percent students who want to know how touse the technology. They all receive a well-round-ed education that includes the humanities and sci-ences. They learn accounting and marketing. Butthe real “spine” of the Business and Technologyprogram, Laucirica explains, is the business plan.Students learn “all the pieces of a company andactually write a business plan. There’s a tension

between theory and reality. This brings them to thereality. They really see how the pieces cometogether.”

Business and Technology students work withengineering students on projects, “almost as con-sultants, ” he says. “The engineering students havea problem to solve. They have to make the widget.Our students look at costs, look at what the com-petition is doing. They look at what it costs thecompetition to make a widget.”

The first honors program began this past spring.In keeping with the program’s real-world focus,students chose the Ford Motor Co. for a case study.

Biz Tech Graduates Attract Attention

A Pharmaceutical Management Cure

The problem? In the words of one pharmaceuticalcompany executive, too many managers in theindustry who are “an inch wide and a mile deep.”

Stevens’ prescription? The new graduate pro-gram in Pharmaceutical Technology Managementoffered by The Howe School.

Dr. Joel Dobbs, who joined Stevens full time at thebeginning of the year, began working on the new pro-gram last fall. The first step was a survey of morethan a dozen senior-level pharmaceutical companyexecutives, a half dozen leading industry consultantsand a handful of Stevens faculty members.

The experts looked at the challenges the indus-try faces today – the explosion of new technology,the rising cost and complexity of R&D, patent expi-rations and regulatory pressures. They also consid-ered the managerial challenges – pharmaceuticalcompanies engage in strategic alliances and part-nerships, which almost always involve the sharingand management of advanced technologies as wellas complex intellectual property issues.

“The answers were fairly consistent,” Dobbssays. “They say they really need people who have abroad understanding of pharmaceutical business.Folks tended to understand their area very well, butnot understand the broader industry.”

“They also need people who communicate welland understand when a new technology should beembraced and when it shouldn’t, people who knowhow to develop and execute strategy,” Dobbs says.

Stevens put together an industry advisory boardof about 15 members to help develop the curriculumand provide feedback.

“We held one big meeting and went through thewhole thing. We had follow up emails and conferencecalls,” he says. After that came the internal processat Stevens; the program was approved in late spring.

Dobbs himself had spent about 25 years in thepharmaceutical industry before coming to Stevens.He was vice president of research information serv-ices and global IT strategy and compliance forSchering–Plough Corporation. In this capacity, he

was responsible for allinformation technologyfor the Schering-PloughResearch Institute aswell as for strategy andIT regulatory complianceglobally. Prior to joiningSchering-Plough hespent 12 years with GlaxoInc. in various manage-

ment and executive positions in regulatory affairs,medical services and information services. He alsospent one year with Glaxo Wellcome as worldwidedirector, information management and analysis. Hehas served on the Compaq Computer CorporationPharmaceutical Advisory Board, the DigitalEquipment Corporation Pharmaceutical AdvisoryBoard, the PhRMA/FDA Information ManagementWorking Group, the PhRMA CIO Forum, the PMAInformation Management Steering Committee, theDocumentum Advisory Council, and the PMA SafetySurveillance Committee.

In all, he’s proud of how the new graduate pro-gram was designed: “It was done in a logical fash-ion, with a great deal of input from people in theindustry.”

“[Companies]need people whocommunicatewell and understandwhen a newtechnologyshould beembraced andwhen it shouldn’t.”

– Dr. Joel Dobbs(left)

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P A R T T W O

It takes an interdisciplinary team that can successfully mesh diverse disciplines to meet the demandsof today’s ever-more-complex global environment. Stevens goes to great lengths to promote this typeof interdisciplinary work because “that’s the real world,” says President Raveché, the real world wherepeople urgently need assistance designing and building complex systems, fighting computer hackers,and even assistance with the decision-making process itself.

Center Delves Into Decision Making ProcessThe Howe School’s Center for Decision Technologies – drawing on a mix of experts in management, engineeringand arts and sciences – exemplifies Stevens’ approach to interdisciplinary cooperation. The center seeks newways to aid human decision-making so that people can evaluate courses of action available to them and the risksinvolved in each, says Jeffrey Nickerson, associate professor and director of E-Commerce-Management.

Business schools have long taught the psychological aspects of decision-making, using various researchmethods, Nickerson says. Management students learn to look at proposed solutions from different perspectives,

to weigh pros and cons and to conduct cost/benefit analysis. At the Center for DecisionTechnologies those management skills are directed at solving technological problems.

In a project with WiNSeC, Nickerson and other researchers looked at a campus map of wire-less connectivity hotspots to determine how an emergency responder could stay continuouslyconnected to an ad hoc network and make the best decisions while en route to an emergency.The project is just one of several Stevens “testbed” research efforts that are an outgrowth ofthe communications failures experienced during the September 11, 2001 terrorist attacks.

Researchers are discovering that ad hoc networks (formed by wireless devices withinrange) have important advantages, such as being able to remain secure when normalwireless service is disrupted in an emergency. But they also pose problems in decision-making and information access relating to national security, emergency response,

search and rescue, and the remote control of robots that the center is now studying. The center has received a grant from the Office of Naval Research, part of the Navy’s Critical

Infrastructure Protection program, to study the interaction of people on mobile networks and semiau-tonomous robots and sensor networks.

“The convergence of robotics and mobile networks has created a new class of problem: how best to move inorder to increase our understanding of situations,” Nickerson says. “What we envision is a new kind of command-and-control focusing on the relationship between movement and communications.”

When talking with colleagues at other universities, the advantage of Stevens’ size and its ability to bringtogether engineering, technology, math, computer and management studies becomes clear, Nickerson says.“Large funding organizations expect to see cross-disciplinary projects. In most big universities that’s impossible.Stevens has a real advantage; it’s easy to do here.”

It Takes an Interdisciplinary Team to Solve Today’s Problems

Uniting to Battle forCybersecurity The news is filled with stories about computerviruses, worms and trojans, with individuals suf-fering privacy violations and identity theft andbusinesses fighting off attempts to break intotheir computer databases. Worldwide losses fromcyber attacks were estimated at $16.7 billion in2004, according to Computer Economics. Morefrightening still, governments factor in the threatof cyber terrorism in addition to other types ofterrorist attacks.

“Attacking computer systems has become alot easier” in recent years, says Manu Malek,director of the cybersecurity certificate programin Stevens’ Computer Science Department.“Hackers are getting more and more sophisticat-ed and attacks are more frequent.”

At Stevens, experts in the Computer Scienceand Telecommunications Management depart-ments and their colleagues in other fields arefinding new ways to fight back to protect theinformation infrastructure.

This year Stevens won a highly competitive grantof nearly $100,000 worth of computer routing,switching and networking equipment from the CiscoSystems Equipment Donation Program. The grantgoes toward strengthening institute-wide educa-tion and research programs in the fields of informa-tion security and assurance, network security, mul-timedia security, secure data mining, and technol-ogy management of emergency communications.

The grant is an important building block inStevens’ plan for growing and strengthening its

security research and educational efforts, says Dr.Susanne Wetzel, a security expert who is an assis-tant professor in the Department of ComputerScience. The equipment covered by this grant willnot only improve the Institute’s infrastructuregreatly, but most importantly will enable innova-tive teaching and strengthen security research inall three schools.

Wetzel notes with pride that these Ciscoequipment grants are much sought after andgiven only biannually to four recipients through-out the country. In 2003 Stevens was named aNational Security Agency (NSA) Center ofAcademic Excellence in Information AssuranceEducation for the academic years 2003 through2006. This recognition for education and researchexpertise in the areas of information security andinformation assurance was a prerequisite forapplying for the Cisco grant.

“We plan toestablish a fullyautonomousshielded lab inwhich studentsand faculty havefull access tothe networkinfrastructure.”

– Dr. Suzanne Wetzel(below right, withAssociate ProfessorRebecca Wright)

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“The proposal had to have an overarchingstory,” says Wetzel. “It had to be integrated. Weneeded to be able to make the whole thing work.”

The equipment grant builds on an educationalgrant which was recently awarded to Wetzel andComputer Science Associate Professor RebeccaWright by the National Science Foundation, titled “Capacity Buildingthrough InterdisciplinaryDegrees in Cybersecurity.”

The project is intend-ed to build Stevens’capacity in informationassurance and computersecurity education bydeveloping new interdis-ciplinary cybersecuritydegree programs on boththe undergraduate and the graduate level. Thegoals are not only to attract new students tothese programs, but to provide these studentswith an education that prepares them morethoroughly for careers as information assur-ance and computer security professionals.

“Lab courses and hands-on projects areintegral components of these programs,”according to Wetzel. “For these purposes, weplan to establish a fully autonomous, shieldedlaboratory in which students and faculty havefull access to the network infrastructure with-out imposing any danger of compromise or dis-ruption on the campus network. The Ciscoequipment will be used to build the basic infra-structure of the laboratory.”

In addition to the new programs and class-es, many existing classes throughout theInstitute’s three schools, including NetworkManagement, Network Design and Introduction

to Networked Information Systems, will benefitgreatly from the new lab facilities, as well asinterdisciplinary faculty research efforts.

Wetzel says also that the new Cisco equip-ment will allow advanced research to be imple-mented and validated in a real networkingenvironment, which in turn may allow for a bet-

ter algorithmic design,in particular for paralleland distributed sys-tems.

Wetzel and Wrightreceived a $125,000 NSFgrant to establish acybersecurity laborato-ry at Stevens. The lab,which will focus on thenetwork security issues

area of cybersecurity, will be “a safe environ-ment in which we can run experiments that wecan’t do on a regular network,” says Wetzel. “Itis a separate lab that won’t interfere with theregular operation of any networks here.” Thelab will serve as a facility for faculty and stu-dent research projects.

The hands-on, state-of-the art lab willprovide students with practical training insecurity and information assurance, preparingthem to meet the challenges in protecting andsecuring our nation’s information infrastruc-ture. The lab will be used for the undergraduatesecurity lab course involving experimentationwith specific security solutions, vulnerabilitiesand exploits, and will allow students to gainexperience by applying their theoretical knowl-edge in practice.

Systems EngineeringProgram is LargestThe need for people with multi-disciplinary skills who candevelop large, expensive critical systems has helped makethe Systems Engineering and Engineering Managementprogram at Stevens become the largest in the country.

Systems engineering has been around fordecades, but the field has grown dramaticallybecause of “the realization that systems are gettingmore complex. Development is not as linear as it usedto be,” explains Dr. Rashmi Jain, associate professor,Systems Engineering and Engineering Management.She sees more formal recognition today of systemsengineering as a separate discipline.

Weapons, medical and communication systems,for example, need to be built and designed to berobust enough to be predictable, she says. “These arethe challenges that are making systems engineeringso important.”

The increasingly compressed time to market andcompetition from outsourcers put pressure on alltypes of companies to design, develop and sell newproducts much more quickly. “It’s now or never. Theycan’t afford trial and error or they will be left out ofthe market. They can’t afford flab.”

That’s where systems engineering comes in, effi-ciently and effectively reducing “flab” through a part-nership with the end user of the system. “Systems engi-neers have to look at who will be the potential user. Theyneed to know what the user wants. They need to trans-late those needs and wants in a meaningful way. Thenthey build systems and test them. They have to verifyand validate to make sure it operates the way it is sup-posed to operate,” Jain explains.

The tremendous demand from government entitiessuch as NASA and the Department of Defense and fromcorporate giants such as The Boeing Company, Lockheed

Martin Corp. and Northrop Grumman Corp. has fueled thegrowth of regional programs and online courses.

UndergraduateEngineering Aims to beMore FlexibleStevens also fosters meaningful partnerships betweenstudents at the graduate and undergraduate levels. Agroup of undergraduates working on their civil engineer-ing senior design project joined with students working ontheir masters in Product-Architecture Engineering todesign a pavilion to house the Concorde at the IntrepidSea, Air & Space Museum in New York City. The resultingdesign was light-weight, cost effective and functional,capturing the grace and visual excitement of theConcorde. This design was presented to the CEO andchairman of the Intrepid board for consideration.

“This pilot project is a model for having under-graduates and graduates work together to develop anaesthetic design for clients. This is something we’retrying to build on,” says Dr. Keith Sheppard professorand associate dean of engineering, Chemical,Biomedical & Materials Engineering Department.

This past year Stevens revised its undergraduateengineering curriculum to allow for more flexibilityand choice in core science requirements. “We want toimprove students’ experience in their first year andhelp make the transition into the rigorous curriculuma little easier,” Sheppard says. One goal of this rigor-ous curriculum is to develop the ability to use both theright brain and left brain, he adds, “because engineersof the future will need both.”

The curriculum changes also will allow studentsmore opportunity to take semesters abroad, so they canbetter compete in the global economic environment.“We want to facilitate an international experience.That’s very important for the future,” Sheppard says.

“We want toimprove the stu-dents’ experi-ence in their firstyear and makethe transition tothe rigorous cur-riculum a littleeasier.”

– Dr. Keith Sheppard

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materials at high resolution. A main theme ofthis research concentrates on the study of poly-mers and polymeric biomaterials, such as hydro-gels, using techniques such as electron hologra-phy and electron energy-loss spectroscopy. Oneof the group’s recent innovations has been thedevelopment of new methods to map the spatialdistribution of water in synthetic materials forhealth and personal care applications usingadvanced methods of cryo-electron microscopy.

The group uses electron microscopes not onlyas materials-characterization tools but also asmaterials-processing tools. High-energy elec-trons can modify the structure and properties ofpolymers, and because a microscope can focuselectrons into fine probes with nanoscale dimen-sions, electron microscopes can be used to pat-tern polymers into nanostructures.

The team has pushed this technology in anentirely new direction by applying it to specificpolymers to influence the way they interact withphysiological systems involving proteins, cellsand tissues.

“The central idea is to create biospecific sur-

faces,” says Libera, “surfaces that interact withphysiological systems in highly controlled ways.

“Polymeric materials have been used

increasingly for a varietyof biomedical applica-tions, including tissue-engineering matrices,implants with biocom-patible surfaces, drugdelivery and biosensors,” Libera explains, “butnew tools and new ways of thinking based onnanotechnology are opening radically differentpathways to achieve success.”

Significantly, Libera’s team is aggressivelyinvestigating the properties of hydrogels, thekinds of polymeric materials that form the basisfor everyday soft contact lenses and other com-mon biomedical applications.

“We use focused electron-beam cross-link-ing to create nanosized hydrogels,” says Libera,“and this provides us with a new method ofbringing the biocompatibility associated withmacroscopic hydrogels into the nanoscaleregime.”

Libera’s work on nanohydrogels holds impli-cations for the eventual production of the nextgeneration of protein microarrays, which can be

used to establish the function of various genesthat become active during cancer, disease andthe aging process.

Below, left to right: Nanostructures andmicrolithographicimagery; Dr. Henry Du; electron optics labteam; Dr. MatthewLibera.

Sometimes it takes teamwork on a grand scale toaccomplish grand things on the nanoscale.

Dr. Henry Du, director and pro-fessor of materials engineering,Chemical, Biomedical & MaterialsEngineering Department, hasbrought together a team of aca-demic and industrial researchers toconduct pioneering work on theintegration of photonic crystal

fibers (PCFs) with nanotechnology for potential-ly robust chemical and biological sensing. Usingmolecular and nanoscale surface modification,state-of-the-art laser techniques and computersimulation, their research will enhance theprospects of PCF sensors, sensor arrays and sen-sor networks for diverse applications such asremote and dynamic environmental monitoring,manufacturing process safety, medical diagno-sis, early warning of biological and chemicalwarfare and homeland defense.

Through basic and applied research, theoptically robust PCFs with surface functional-ized, axially aligned air holes are expected to

achieve a quantum leap inchemical and biological detec-tion capability over conven-tional fiber-optic sensor tech-nology. PCF sensors enabled bynanotechnology also have thepotential to be a powerfulresearch platform for in situfundamental studies of surfacechemistry and chemical/bio-

logical interactions in microchemical and micro-biological systems.

Du’s team cuts across a broad spectrum of

disciplines. The project also involves postdoc-toral fellows, graduate students and severalundergraduate/high-school summer researchscholars, giving them training and exposure inchemical and biological sensing and monitoring,a priority area of federal research and develop-ment. The business community is directlyinvolved in this project; it is being conducted incollaboration with OFS Laboratories (formerlythe Optical Fiber Division, Bell Laboratories), aworld leader in fiber optic research, via NSF’sGOALI mechanism.

Engineering the Nano-Bio InterfaceDr. Matthew R. Libera leads the MicrostructureResearch Group and is director of the Electron-Optics Laboratory in The Schaefer School. Usingpowerful transmission and scanning electronmicroscopes, Libera’s team graphically demon-strates the possibilities that flow from engineer-ing materials in the micro and nano worlds.

Their research centers on the development

and application of advanced electron-opticaltechniques for the measurement and control ofmicrostructure and morphology in engineering

Big Steps in Nanotechnology

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P A R T T H R E E

Stevens Institute is making its outstandingacademic presence known throughout theworld, both on the ground and on the Web. Inaddition to classes on the Castle Point cam-pus, the Institute provides a rich selection of

courses on the Internet. Stevens also is atrendsetter in hybrid learning, an effi-cient and effective combination ofonline and face-to-face education.

WebCampus, Stevens’ online unit,now has more than 5,000 graduate stu-

dents from more than 40 states within theUnited States and 40 nations around the

world. A winner of the Sloan Award asthe “best online university” in thenation, WebCampus offers 31 gradu-ate certificates and 12 master’sdegrees. Navigating Web links allows

potential students to obtain informa-tion about courses in telecommunica-

tions management, technology manage-ment, networkedinformation sys-tems, computer science and wire-less communica-tions, among othertechnical and busi-ness programs.

These onlineand hybrid courses are a practical approachespecially well suited to the needs of profes-sionals seeking to combine high-poweredcareers with continuing education. Stevens

“insists on academic rigor” in its online andhybrid programs, just as much as it does in the traditional class-room setting, saysJerry Luftman,Howe Schoold i s t i n g u i s h e d service profes-sor and director ofthe Master of Sciencein Information Systems Management program.

More than 80 percent of the working pro-fessionals taking classes are sponsored bytheir companies. “The proof of our success isnot only in the numbers but in all the corpo-rate sponsorships,” Luftman says. Stevensprovides more than 30 global companies andUS government agencies with graduate educa-tion and training on its Hoboken campus, atcorporate sites and online.

Among the latest US companies to takeadvantage of Stevens’ WebCampus experienceare Fortune 500 giants The Boeing Company,the world’s largest aerospace company andthe second largest manufacturer of commer-cial aircraft; Intel Corporation, the world’slargest computer chip maker and a leadingmanufacturer of computer, networking andcommunications products; and VerizonCommunications, Inc., the leading provider ofhigh-growth communications services and thelargest provider of wire line and wireless com-munications.

Making Our Presence Known, On the Ground and the Web

Stevens has extended its hybrid-learningprogram far beyond the United States. “Wedecided ‘let’s go overseas and find partners

there.’ We want to combine thestrength of Stevens and the

strength of the local institu-tions. So far the reception hasbeen nothing short of phe-nomenal,” says Luftman, pre-

dicting that “Stevens will makeits mark as a global university.”

Stevens Makes Its Markin ChinaThe Institute is already making its mark inChina, a nation of 1.3 billion people whoseleaders are intent on expanding technology-intensive industries such as petrochemicalsand digital electronics.

Stevens held a historic commencement cer-emony in Beijing in January for the first 21 grad-uates from the Stevens TelecommunicationsManagement master’s degree program, in part-nership with the Beijing Institute of Technology(BIT). Maureen Weatherall, vice president for

University Enrollment and Academic Services,Professor Kevin Ryan and officials of theChinese Ministry of Education made remarks atthe ceremony.

Stevens’ program with BIT, one of China’shighest-ranking engineering schools, wasapproved by the Chinese Ministry of Educationand other government bodies and is the firstsuch hybrid degree from a US university in China.

“Students in Beijing earned their master’sfrom Stevens – it’s no different from thedegrees the school confers in Hoboken,” saysDr. Audrey K. Curtis, executive director ofStevens’ Telecommunications and ProjectManagement programs at The Howe School.

She sees the Institute’s program in China as“a giant step in extending Stevens’ graduateeducation to students outside the US.”

Instruction was delivered one-third onlineby Stevens’ faculty, one-third by Chineseinstructors in Beijing, and one-third byStevens faculty in intensive courses in China.Curtis herself spent ten weeks in Beijing, deliv-ering live instruction. Other Stevens facultyalso spent time teaching in the course at theBIT campus.

It was a learning experience for instructors

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Clockwise from left:BIT officials during Stevensgraduation ceremony; MSISalumna Dening Wu-Lohez withDr. Luftman; VP MaureenWeatherall with BIT graduate;the French Consul in New Yorkwith Wu-Lohez and MSIS students from France.

Clockwise from left:BIT officials during Stevensgraduation ceremony; MSISalumna Dening Wu-Lohez withDr. Luftman; VP MaureenWeatherall with BIT graduate;the French Consul in New Yorkwith Wu-Lohez and MSIS students from France.

as well as for students, according to Curtis. “InChina, professors give formal lectures in bigclasses and students are rarely asked to makepresentations in class. In the US, we expectmore interaction. We had to work to draw thestudents out, to get them to participate.”

She finds Chinese students very enthusias-tic about being able to receive a US degree,with courses conducted in English, whileremaining in their home country. “They’recommitted and hard working.” The first groupstarted classes in November 2003. Of thisyear’s graduating class, three have alreadyapplied for Ph.D. programs – one of themapplied to Stevens. Another graduate pro-gram, this one in photonics and optoelectron-ics, is under way at BIT.

Stevens is teaming up with other institu-tions of higher learning in China. Stevens’graduate program in Project Managementbegan this fall at Central University of Finance

and Economics (CUFE), also in Beijing.Graduates of CUFE often fill high-level posi-tions in China’s burgeoning telecommunica-tions industry. Stevens has signed a memoran-dum of understanding with Beijing Universityof Posts and Telecommunications (BUPT) tolaunch several programs for Chinese graduatestudents in technology and management.

The Beijing partnership is just the begin-ning. Luftman reports that Stevens has a half adozen new programs in the works overseas,including:

Sofia, Bulgaria, at the University of Sofia:Stevens’ Master of Science in InformationSystems (MSIS) program, with a concentrationin computer science, will be offered in Sofia.

In Paris, France, at the Ecole Pourl’Informatique et les Techniques Avencées(EPITA), the same MSIS program as in Bulgariais being offered. French students used to go toStevens each January to take the course; now

all seven courses will be available in Paris.Guayaquil, Ecuador, at Escuela Superiore

Politecnica del Litoral (ESPOL): The Master ofTechnology Management and MBA programsare being offered this fall.

S T E V E N S S T U D E N T S S T A N D O U T A S A C H I E V E R S A N D L E A D E R SP A R T F O U R

Stevens students are up-to-date and well pre-pared for the challenges of today’s complex, mul-ticultural workplace. The Institute itself is “aclosely knit, but also very diverse community. Thething that keeps us together is mutual respect,”Raveché says. “We learn from a richly diversegroup of students and faculty. Our graduates haveworked with different cultures every day.”

Commitment and focus on the undergraduateexperience has resulted, for the first time, in amore than 75 percent retention rate. As part ofStevens’ planned expansion, the number of fresh-men entering the institute reached a new high.

“In academic terms, the retention rate is a bigaccomplishment,” says Maureen Weatherall, vicepresident for university enrollment and academicservices. She credits faculty members for theirsupport in making for a stellar student experienceat Stevens.

Faculty members are “give-back people who

want the students to succeed,” agrees LouisLaucirica. “We want them to see the applicationof science, to take ideas from the lab to cus-tomers.”

The higher retention rate is also a result ofStevens’ richer array of academic offerings. “Inthe old days you went to Stevens and became amechanical engineer,” he says, and, if youchanged your mind, you left Stevens.

Now, with programs such as Business andTechnology, there are more options.

“This is a real choice. Students can transferinto this program and companies love them” whenthey graduate, he says. So much so that 90 percentof the students have jobs lined up at graduation.

“That’s the proof of the pudding. They’re ableto go out there and do their stuff,” Laucirica says.

Music technology is another example of therange of options at Stevens. A group of six stu-dents created an innovative, student-run record

label.Unlike most academic record labels,

Castle Point Records reaches out beyondthe limits of its school’s own musicalgroups. For its first project, the label isrecording and producing original musicat HarariVille Studios. Carlos Alomar,long-time David Bowie guitarist (whoalso worked with Duran Duran, Iggy Pop,Luther Vandros and John Lennon) who isthe president of the New York chapter ofthe National Association of RecordingArts & Science (NARAS), has producedtwo songs for the release and assisted on

Stevens Students Stand Out as Achievers and Leaders

a third. Under the guidance of Stevens’ Music and

Technology director, David Musial, the studentsmanaged virtually everything, including procuringfunding, artist scouting and recruitment, and thecreation of the overall business plan document.Sponsored by a Technogenesis start-up grant fromthe Office of University Research and EnterpriseDevelopment, Castle Point Records will functionas a student organization at the Institute. Thelabel planned to release its first album in late2005.

“The whole experience has been unbeliev-able,” says label president Ian Wolf, “It’s a newapproach to the traditional college record label.We’ve all learned so much and produced an albumthat rock fans will actually like.”

“This is what Stevens’ learning environment of

Technogenesis is all about,” VP Wisniewski says,“students collaborating with faculty and profes-sionals in industry to create new market-basedinitiatives that are self-sustaining, and thatenrich the learning environment for current andfuture students.”

Institute MarksGraduation MilestoneTrumpeters heralded the procession on May 26 asthe Institute graduated its largest undergraduateclass ever: 377 undergraduates. Also, 845 gradu-ate students received degrees, including the firstgraduating class of MBA recipients, and close to100 were awarded graduate certificates.

For the second straight year graduation tookplace outdoors. The combined number of gradu-ates and family members attending has grown somuch in recent years that the event has expandedbeyond the capacity of the university’s SchaeferAthletic Center, where previous graduations tookplace.

New Jersey Congressman Robert Menendez (D-13th District) and Dr. Kevin M. Cahill addressedthe students, their families and administrationand faculty members. Both Menendez and Cahillreceived honorary doctorates in engineering.

During his commencement address, Menendeztold graduates that “technology can be a vehiclefor humanity’s progress and well-being.”

“Democracy itself – the core principle of ournation – has spread through technology,” he said.“The Internet, and all forms of modern communi-

Clockwise from left: 2005Valedictorian Andrew Corrigan;Castle Point records team;jacket of first Castle PointRecords production,"Delusions of Grandeur."

“ Technology hasbecome the

ultimate connector of

people to people,

society to society,

culture to culture.”

– Cong. Robert Menendez

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cation, has made it much tougher foroppressive regimes to hide the hope andpromises of freedom from their citizens.

“Technology has become the ulti-mate connector of people to people,society to society, culture to culture,and with that, liberty and democracyare communicated across traditionalborders. Having family myself who fledan oppressive regime to come to thiscountry seeking freedom, anything thatmakes freedom more accessible is dear

to my heart and soul. I hope you keep it dear toyours as you move out into the world.”

Menendez is the third-ranking Democrat in theUS House, the highest-ranking Hispanic inCongressional history, and the only Hispanic everelected to a leadership position, in either chamber,by either party.

“I hope you invent. I hope you create. I hope youfind solutions, build businesses, bridge the gaps,expand the world, know where you come from, knowwhat you stand for. And live it in the work you do,”Menendez told the graduates.

“Education should have brought you to an

appreciation of your own individual wonder, andgiven you the confidence to share, even if there aredangers in exposing your vulnerabilities,” Cahillsaid in his address. “Without that courage nothinggood happens – people wouldn’t fall in love, theywouldn’t sacrifice to make other lives better, andthey wouldn’t grow, gently and generously, accept-ing others’ faults as well as their virtues.”

Cahill is director of The Institute ofInternational Humanitarian Affairs at FordhamUniversity and president of the Center forInternational Health and Cooperation in New York.He is an expert on tropical medicine and a leader inhumanitarian campaigns.

C.K Prahalad, the Harvey C. Fruehauf Professorof Business Administration at The Ross School ofBusiness at the University of Michigan, Ann Arbor,was the honorary degree recipient for the graduateceremony. Prahalad specializes in corporate strat-egy and the role of top management in diversified,global corporations.

Prahalad has been ranked among the Top Tenmanagement thinkers in every major survey formore than 10 years. BusinessWeek has said thatPrahalad may well be “the most influential thinker

on business strategy today.” A perfect 4.0 made Andrew Corrigan “first in

class.” Corrigan, of Merrick, L.I., received the degreeof Bachelor of Science in Computational Science,with a concentration in Computer Graphics.

Athletics Program HasStandout YearStevens athletics had a standout year, “it’s bestyear ever,” says Athletic Director Russ Rogers.

The Institute finished among the top 50 schoolsin the US Sports Academy (USSA) Division IIIDirectors’ Cup. The USSA Directors’ Cup was devel-oped as a joint effort with the National Associationof Collegiate Directors of Athletics (NACDA) andhonors institutions maintaining a broad-basedprogram and achieving success in many sports.

With five teams qualifying for NCAATournaments this past year and four advancingpast the first round, Stevens earned its highest-ever finish at 46th, marking one of the most suc-cessful years in the history of athletics at the insti-tution. In addition, Stevens finished second amongtechnology-based universities. The five teams

qualified for NCAA tournaments were Men’s Soccer;Women’s Soccer; Women’s Volleyball (first time inschool history); Men’s Lacrosse; and (for the firsttime in the school’s history) Women’s Lacrosse.

Stevens junior Men’s Soccer player Brian Marksof Yardley, Pa., was named a first-team All-American by the National Soccer CoachesAssociation of America (NSCAA). Marks is the firstStevens student-athlete in any sport to earn first-team All-America honors. He was a third-teamselection last season. Giuseppe Incitti (Men’sSoccer, 2002) and Matt Grande (Men’s Lacrosse,2004) were second-team selections.

The two-time Skyline Conference Player of theYear, Marks helped Stevens to a 21-2-1 overallrecord, a second straight Skyline championship andsecond consecutive NCAA Division III Tournamentberth. Stevens advanced to the Sweet Sixteen of theNCAA Tournament for the second year in a rowbefore falling to Richard Stockton 2-1 in overtime.The Ducks were ranked seventh in the nation in thefinal NSCAA Division III poll.

Two wrestlers, Michael Detsis and BrandonMacWhinnie, earned trips to the NCAA Wrestlingchampionships. Both athletes were freshmen on a

Stevens studentscontinued to excelin Equestrian competition, Men’sand Women’sSoccer, Lacrosseand Volleyball.

“ Our studentsnot only had agreat athletic

year, but a greatacademic one.”

– Athletic Director Russ Rogers

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first-year team. “Seven teams – Men’s Soccer,

Women’s Soccer, Women’s Volleyball,Baseball, Men’s Lacrosse, Women’sLacrosse, Men’s Tennis – either set ortied school records for wins in a sea-son,” says Rogers. “Eight, if you countField Hockey.”

“Our students not only had a greatathletic year, but also a great academ-ic one,” he notes. “Their overall teamGPAs were 3.1 for the academic year.”

And the Stevens Equestrian Team had a nation-al champion – its first ever individual nationalchampion in school history. Freshman Kerri Rettigfinished first in the Intermediate on the Flat at the2005 Intercollegiate Horse Show Association (IHSA)National Championship Show. It was the first timea member of Stevens’ Equestrian Team, inaugurat-ed just three years ago, took home a national com-petitive award.

The key to winning is “being able to communi-cate with the horse,” says Rettig, who has been rid-ing for almost 10 years. At the Nationals, “you don’tride your own horse. You draw a number. You don’tget to practice on that horse.”

Rettig came to Stevens to study engineering butrecently switched to the rigorous undergraduateBusiness and Technology program.

“She had offers from a number of institutions,but it was Stevens’ well-rounded course of fresh-man academics, as well as the opportunity to ridecompetitively with the equestrian team, thattipped the balance toward Kerri’s choice ofStevens,” says Equestrian Coach Patti Zwaan. “Hertriumph at the IHSA Nationals puts Stevens’ eques-trian athletics program squarely on the nationalcompetitive map.”

Year of ExternalRecognitionIt was a year of external recognition for the insti-tution, one filled with awards and accolades.

In the US News & World Report rankings fornational universities, Stevens climbed to #71 – ris-ing farther, faster, than any other university in theNational Top 100. Stevens continued its swiftupward movement in qualitative and quantitativecriteria among all national universities grantingdoctoral degrees. The ranking represents animprovement of ten places, which is the largestadvance within the top 100 universities. Since 2000,Stevens has moved up 20 positions.

“Simply put, the great work of our faculty, stu-dents, staff, and administration has got us towhere we are today in terms of national ranking,”Raveché says. “Our movement upward towards theTop 50 indicates that our momentum in educationand research has never been greater than at thismoment in our 135-year history.”

Retention and graduation improved signifi-cantly, contributing to the higher standing, thepresident notes. Stevens is now, in the category ofActual Graduation, ranked 58, up from 83 in 2004.Ranked 39th in SATs, Stevens continues to attractthe most talented students in the nation. “Alumnigiving remains strong, an area where Stevensplaced 24th in the nation,” said Raveché.

Stevens ranked among the Top 25 American col-leges and universities that have tailored theirundergraduate business and technology curriculato encourage young entrepreneurs. The PrincetonReview examined and critiqued 357 national pro-grams, with the result being its new list of America’sMost Entrepreneurial Campuses 2004. Ranked at#18, Stevens is the sole university on the list to besituated in the hub of world commerce near NewYork City, at the heart of the Philadelphia-Bostonaxis of higher educational institutions.

The Howe School of Technology Management

received an especially impressive list of honors: The school was cited as co-existing among the

“World’s Elite Research Institutions in Managementof Technology.” The award was accepted by ActingDean Lex McCusker at a conference of theInternational Association for Management of

Technology (IAMOT) held in Vienna, Austria. Howe was named one of the top-five graduate

business and technology programs by OptimizeMagazine.

It was named in the Top-10in research in technology man-

Feeling the Pain with Team MECCo

Dr. Norman Marcus, a noted pain management specialist, slides the medical deviceover the “patient’s” body. It’s not a real patient, but a Stevens undergraduate whois studying biomedical engineering.

“So far the device can’t be used on actual patients, so we volunteered one of ouryoung healthy bodies to test it,” says Ryan Stellar, a member of a SeniorDesign Project team in Professor Vikki Hazelwood’s BME 424 class known as“Team MECCo.”

Team MECCo – Stellar, Jeckin Shah, and Daniel Silva – volunteered theirminds to work in collaboration with Dr. Marcus to design and build this spe-cial electrical stimulator device, which facilitates diagnosing and treatingpain. The device is patent pending.

Dr. Marcus teaches at NYU Medical School, as well as conducting a med-ical practice, and plans to coordinate clinical trials at NYU. Stevens andTeam MECCo will continue to collaborate with him, and are discussing theprospect of starting a new biomedical company together.

The project came about because the doctor “has a friend who is friends with President Raveché,so it trickled down that Dr. Marcus had this methodology and was looking for help to develop it,” saysStellar. “He had a patent on the methodology but he needed engineering and tech people.”

Team MECCo had complementary experience from a recent co-op project, so “we dissected hispatent,” says Stellar, and “at our first meetinghe could see we had our homework done. I thinkwe impressed him.”

Team MECCo’s work has “a real-life flavor,”says Hazelwood, senior lecturer in theChemical, Biomedical & Materials EngineeringDepartment. “It demonstrates that a projectcan hold water in the real world.”

It’s a great example of today’s “transla-tional research,” she says, showing how a proj-ect “can go from the lab benchtop to the bed-side in three to five years.”

It was a year of

external recognition,

filled withawards andaccolades.

Clockwise from left: Dr.Norman Marcus; the MECCostimulator device; TeamMECCo, with VP Helena S.Wisniewski: Ryan Stellar,Daniel Silva, Wisniewski,and Jeckin Shah.

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agement by The Journal of ProductInnovation Management.

And it was one of five centers world-wide recognized by SAP as a Center ofExcellence in Business ProcessInnovation.

Also, the US Distance LearningAssociation (USDLA) Board presentedStevens with its new 21st Century BestPractices Award for Distance Learning. Theaward recognizes the leadership of trend-setting and innovative corporations and

nonprofit agencies and is the highest awardbestowed upon an organization in the industry. Theaward is given to organizations that demonstrateextraordinary achievement through distance learn-ing. Its recipients have distinguished themselves inareas that include research and writing as well asleadership activities in regional, national or inter-national forums. They have been active in meldingeducation and training technologies to enhancethe learning experience of those at a distance.Recipients are singled out for their positive impacton the distance learning industry.

The Engineering Management undergraduateprogram was one of five national programs recog-nized for excellence by the American Society forEngineering Management (ASEM). The

program is part of the Systems Engineering andEngineering Management (SEEM) Department.

Research, Awards &AchievementsStevens faculty and research centers have madeimpressive gains in sponsored research.

New research initiatives have been undertak-en to build rapidly on the wealth of expertise andferment of inquiry that characterize the Stevensfaculty. Efforts in biomedical engineering,nanoscale technologies, cybersecurity, mathe-matical cryptography and network security, aswell as computer modeling for more secure portsand harbors, have all added to Stevens’ renownas a wellspring of revolutionary ideas and appli-cations.

Dr. Gary Lynn was recognized by theInternational Association for the Management ofTechnology (IAMOT) as one of the most activeand prolific scholars in the area of innovationand technology management. Business 2.0 mag-azine also named him one of the nine leadingmanagement gurus in the United States.

Dr. Rashmi Jain has been appointed head ofresearch and education for the InternationalCouncil on Systems Engineering (INCOSE). INCOSE

comprises more than 5,000 members in 50 char-tered chapters worldwide and more than 40Corporate Advisory Board members from govern-ment, industry and academia.

The National Science Foundation (NSF) hasawarded Professor Costas Chassapis and histeam at Stevens a grant of $100,000 to studyhow to create an accredited online undergradu-ate mechanical engineering degree. In additionto Chassapis, who serves as the PrincipalInvestigator, the research team at Stevensincludes, from the Mechanical EngineeringDepartment, Associate Professors Hamid Hadimand Sven Esche and Assistant Professor FrankFisher. Robert Ubell, dean, School of

Professional Education, andKeith Sheppard, associate deanof engineering, are also mem-bers of the research team.

Drs. Christos Christodoulatos,Erich Kunhardt, GeorgeKorfiatis, and Richard Crowewere awarded a patent for asegmented electrode capil-lary discharge, non-thermalplasma apparatus andprocess for promoting chemi-cal reactions.

The ingenuity of seniors at Stevens was ondisplay during Senior Engineering Design Day. Ateam of Civil Engineering seniors from Stevensemerged victorious in a tough competition withsix other universities in the Northeast RegionalStudent Steel Bridge Competition. The studentsreceived awards in the Regional Competition forEconomy, Lightness, Construction Speed, andFirst Place Overall.

New FacultyJan Klein joins The Howe School as an instructor.Professionally, he has been involved in manyareas of capital development, controllership,

investments and investor rela-tions, business developmentand marketing and sales. Heholds an EMBA from CornellUniversity (1987), a MBA inFinance & Investment from GeorgeWashington University (1972) anda BS in Aerospace Engineeringfrom Pennsylvania State University(1972).

Peerasit Patanakul joins TheHowe School as an associate pro-fessor and postdoctural fellow.Patanakul earned a doctorate in

Top center: Dr. Rashmi JainBottom , left to right: Dr. Costas Chassapis, Dean Erich Kunhardt, Dean George Korfiatis, Jan Klein, Dr. PeerasitPatanakul.

New research initiatives have

been undertakento build rapidly

on the wealth ofexpertise and

ferment ofinquiry.

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Systems Science/ Engineering Managementfrom Portland State University in 2004.His research centered on the develop-ment of a decision-support model forassigning multiple concurrent proj-ects to project managers. Hisresearch interests focus on projectmanagement, new product develop-ment and strategic management. Heis a member of The ProjectManagement Institute, IEEE andProfessional Engineer, Engineering

Institute of Thailand and serves as theConference Coordinator for the ProjectManagement Track for the InternationalConference on Management of Technology. Inaddition to his doctorate, Patanakul holds aMaster of Science degree in EngineeringManagement from Portland State University(2000) and a Bachelor of Engineering degree inChemical Engineering from ChulalongkornUniversity, Bangkok, Thailand.

Xiaojun Yu joins the School of Engineering asan assistant professor in the Chemical,

Biomedical and Materials Engineering Department.Prior to coming to Stevens, Yu was a researchassociate at the University of Virginia’sDepartment of Orthopaedic Surgery, where hestudied tissue engineering and biomaterials. Healso served as a research post-doctorate asso-ciate in advanced biomaterials and tissue engi-neering in the Chemical Engineering Departmentof Drexel University. He has been widely pub-lished and frequently presents papers at indus-try conferences and meetings. Yu is also a mem-ber of the Society for Biomaterials as well as theMaterials Research Society. He holds a doctor-ate in Biomedical from Case Western ReserveUniversity, Cleveland, Ohio (2002) and a Masterof Science degree in Biomedical Engineeringfrom Peking Union Medical College, Beijing,China (1992). Yu earned a Bachelor ofEngineering degree in Polymeric Materials andChemical Engineering from Tsinghua University,Beijing, China (1989).

Yi Guo joins the School of Engineering asan assistant professor in the Electrical andComputer Engineering Department.

Previously, Guowas a visit ingAssistant Professorin the Departmento f E l e c t r i c a l a n dComputer Engineeringat University ofC e n t r a l F l o r i d a .S h e a l s o w a s aresearch fellow inthe Computer Scienceand MathematicsDivision of Oak RidgeNational Laboratory,Oak Ridge, Tenn. Shehas served as areviewer for manyp r o f e s s i o n a l

journals and conferences and has been widely published. Guo is a senior member ofthe Institute of Electrical and ElectronicsEngineers (IEEE) and a member of Sigma Xi,the Scientific Research Society. She earned aPh.D. at The University of Sydney, Australia(1999), a MSEE degree, Xi’an University ofTechnology, China (1995), and holds a BSEEfrom Xi’an University (1992).

Hongjun Wang joins the Department ofChemical, Biomedical and Materials Engineering(CBME) as an assistant professor. Wang’sresearch interests focus on biomaterials design,

cellular and tissue engineering, and cell signal-ing in tissue engineering. Before joining Stevens,he was a postdoctoral research fellow atThe Wellman Center for Photomedicine,Massachusetts General Hospital and HarvardMedical School. He then worked at a Dutch bio-medical company, IsoTis NV. Wang has received abroad and systemic training in chemistry andpolymer chemistry, as well as biomaterialsdesign and tissue engineering. He has performedresearch in diverse fields and is the author of 15scientific papers in the fields of polymer chem-istry, biomaterials, tissue engineering and cell

An Incubator Company Grows Up

What could be a better capstone to Stevens’year of accomplishments than the launch of oneof its incubator companies into the real world?The acquisition of HydroGlobe, a Technogenesis environmental technology company incubated atStevens, exemplifies the completion of the Technogenesis cycle. HydroGlobe was acquired by GraverTechnologies, a leading manufacturer of filtration and separation products. John Schroeder, aStevens alumnus and the past President of HydroGlobe, assumes the role of Vice President ofOperations.

HydroGlobe was founded in 2000 by three Stevens professors based on research conducted at theCenter for Environmental Systems, directed by Dr. Christos Christodoulatos. In addition toChristodoulatos, the founders include Dean Korfiatis and Dr. Xiaoguang Meng, director of technicaland academic development at CES. The company produces patented products for the removal ofheavy metals – including lead and arsenic – from water.

“These technologies treat potable water supplies at both the home and municipal level, for vastpopulations in the US and abroad,” notes Korfiatis. The acquisition “is a great recognition of our pio-neering work at The Schaefer School and in the Center for Environmental Systems specifically.”

The acquisition and the agreement with Graver to license Stevens’ water-filtration technologiesthrough their HydroGlobe unit “is a major affirmation of Stevens’ vision of Technogenesis,” saysWisniewski, who negotiated the technology licensing agreement on the Institute’s behalf. “It is proofthat the innovation-to-implementation philosophy of technology development works on a grandscale, and that it offers major long-term benefits to society and to the Institute through IP royaltiesand licensing.”

Raveché calls it “a validation of our philosophy at Stevens, which rests on the belief that real-world solutions can be found for major real-world problems through technology innovation.”

New faculty have added to

Stevens’ renownas a wellspring

of revolutionaryideas.

Opposite, left to right:Dr. Xiaojun Yu, Dr. Yi Guo.

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signaling. Wang received his doctor-ate in Polymer Chemistry and Physics(Biomaterials Discipline, 1998) fromThe Institute of Polymer Chemistry,Nankai University, Tianjin, China,with honors. He received his seconddoctorate in Biomedical Engineering(tissue engineering) from TheInstitute for Biomedical Technology,University of Twente, TheNetherlands, in 2003.

Ionut Florescu joins theDepartment of Mathematical Sciences as anassistant professor. Florescu comes to Stevensfrom the Department of Statistics at PurdueUniversity, where he received his doctorate inStatistics (2004). He had also previously servedon the faculty in the Department of Physics atthe University of Bucharest, Romania. His pri-mary research area is the Mathematics ofFinance, with a focus on the modeling, analysisand approximation of option prices in the sto-chastic volatility world. He was the recipient ofthe Purdue Research Foundation Grant, and thePuskas Memorial Fellowship. Florescu also holdsa Master of Science degree in Statistics with aspecialization in Computational Finance from

Purdue University, and a Master of Sciencedegree in Mathematics with a specialization inStochastic Processes from the University ofBucharest.

X. Frank Xu joins the Department of Civil,Environmental and Ocean Engineering as anassistant professor. His areas of research inter-est include Computational Homogenization;Stochastic Homogenization of Materials;Multiscale (Stochastic) Modeling; Simulationof Random Morphologies; Optimization ofNano/Micro-Architectured Materials; PorousMedia; Multiscale Finite Element Methods; andProbabilistic Mechanics. He has worked profes-sionally as a Civil Engineer for the ShanghaiForeign Service Company, Shanghai, China, andas an Assistant Engineer for the Ministry ofTransportation in Shanghai. He received a doc-torate in Civil Engineering (2005) from TheJohns Hopkins University, and a Master ofScience degree in Civil Engineering from theUniversity of Akron (2001). He also received aM.Sc. degree with distinction in OffshoreEngineering from The Robert Gordon University,Scotland, and a Bachelor of Engineering degreein Hydraulic Structures from TsinghuaUniversity, China.

The Edwin A.Stevens Societyhas achieved a

membership roster of 500 – a long-desired

goal.

New LeadershipIn the Office of Development and ExternalAffairs, long-time Vice President Jim Snyderaccepted an appointment as special assistantto the president. Stepping in as Acting VicePresident for Development and External Affairsis Marjorie Everitt. She and her team are build-ing strategies to develop new levels of supportand recognition for Stevens’ programs, facultyand facilities.

In March Stefano Falconi assumed office asStevens’ vice president of finance, treasurerand chief financial officer. He is now in theprocess of creating the necessary financialmechanisms and controls to guarantee thatfuture growth can proceed apace.

Development &FacilitiesIn a historic first, the Edwin A. Stevens (EAS)Society, the Institute’s premier donor organiza-tion, has achieved a membership roster of 500 –a long-desired goal for the Office ofDevelopment and External Affairs, which over-sees the activities of the EAS Society.

Stevens has added $1 million to its endow-ment for scholarships, notes Marjorie Everitt,acting vice president for development and

external affairs.Stevens’ goal is to “make all

available use of space” within itscompact urban setting, says HankDobbelaar, vice president forfacilities and support services. Tothat end, Stevens is refurbishingand renovating several sites oncampus.

Now under construction, TheRiver Terrace Apartments complexwill open in late 2006, ready toaccommodate upward of 200

undergraduate residents. Most of the buildings,tenements and brownstones that date from theearly 20th century, have not been fully usedsince 1993, when student residents were relo-cated elsewhere on campus.

The renovation and expansion of the world-renowned high-speed testing tank in the Centerfor Maritime Systems’ Davidson Laboratory willprovide Stevens with the most modern facilityin the world for testing naval architecturaldesign and large-scale environmental andocean engineering projects. Re-opening of thefacility is slated for early 2006.

The Walker Gym received a $4.5 millionupgrade that includes state-of-the-art car-diovascular facilities, a running track, newlocker rooms and a tunnel between Walker Gymand the Schaefer Athletic and RecreationalCenter.

Finally, the renovation of the fourth-floorof the Edwin A. Stevens Building has provided amuch-needed modern suite of offices and con-ference facilities for the dean of engineeringand other administrative staff.

Opposite bottom, left toright: Dr. Ionut Fiorescu,Dr. X. Frank Xu, Jim SnyderTop, left to right: MarjorieEveritt, Stefano Falconi.

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Faculty ProfilesRajarathnam Chandramouli:Secrets Worth 1,000 WordsIf a picture is worth one thousand words,then how much information could a ter-rorist hide in an image?

The question is far from theoretical,says Stevens Associate Professor ofComputer Engineering RajarathnamChandramouli. By making seemingly ran-dom alterations in a digital image, ter-

rorists could embed text or diagrams inside an imagewithout changing the picture in any visible way. Childpornographers have used the technique to hidepornography inside seemingly innocuous pictures.

Digital steganography — Greek for “coveredwriting” — is extremely hard to find, saysChandramouli. While national security software canscan text for critical patterns and key words, infor-

mation embedded in pictures slips through thesame spam filters.

Digital steganography hides data by makingsmall changes in the dots of color, or pixels, thatcomprise a digital image. A grayscale photograph, forexample, has 256 shades of gray. Each is described byan eight-bit number ranging from 11111111 (white)to 00000000 (black). Steganography encodes data bychanging the last bit of the number.

Nudging the gray level up or down one step isimperceptible to the human eye. Yet passive ste-ganalysis can identify those changes statistically. Itdoes this by comparing each pixel to its neighbors.“It’s looking for the ‘wrong’ pixel, the gray pixel sur-rounded by eight black pixels,” says Chandramouli.

By looking at the number and pattern of “wrong”pixels, analysts can tell whether an image containsa hidden message. Unfortunately, saysChandramouli, conventional statistics cannotdetermine the length and location of the full mes-

sage or the algorithm used to embed it. Uncovering the complete message is

especially difficult because data usuallyhides in the least uniform parts of images,such as leaves or hair, where colors changeand blend into one another. Such chaoticenvironments create digital noise thatobscures the data. Since each pixel in a colorphotograph contains 24 bits that describemore than 16 million possible colors, findingthe “wrong” pixels amid all the noise isextremely difficult.

To unravel the puzzle, Chandramouli turnsto a technique he calls active steganalysis. Ituses advanced statistical methods speciallydeveloped to separate nonrandom data fromchaotic noise. It uncovers small pieces of themessage one at a time. “It’s like piecingtogether an eye, a mouth and stripes untilyou finally see the tiger in the grass,” he says.

Funded by US Air Force and National ScienceFoundation grants, Chandramouli and Stevens

colleague KoduvayurSubbalakshmi are col-laborating on ways tospeed analysis, whichis currently very com-putationally intensive,and actually read thehidden message afteridentifying its location.

“Our goal,” hesays, “is to take awayan easy way for terror-ists to pass secrets toone another. If we cando that, we can makethe world safer.”

Christos Christodoulatos: Creating anEnvironment for Discovery“It takes a lot of basic science to solve real prob-lems,” says Christos Christodoulatos, director ofthe Center for Environmental Systems (CES).

“That’s why our engineers work with physicists,mathematicians, and chemists. I personally feel thatif we don’t achieve basic scientific breakthroughs, itis going to be very difficult to engineer solutions forthe challenging problems we face today.”

This multidisciplinary approach has made CESone of the nation’s fastest-rising environmentalscience and engineering facilities. Since it wasfounded in 1989, CES researchers developed newtechnologies and spun off businesses while assem-bling the specialized equipment needed to achievefundamental discovery.

The center’s strength resides in its ability totrack and remove pollutants from water and soil.Sometimes its findings upend conventional wisdom.That was certainly the case when CES assessed theenvironmental impact of tungsten.

“The US Army wanted to replace lead anddepleted uranium in bullets and projectiles withtungsten,” explains Christodoulatos. “Everyone

thought it was nonreactive, but we found tungstenraises soil acidity, reduces plant growth, and dis-solves in water in concentrations higher than lead.”

CES used many of the instruments and protocolsdeveloped to monitor tungsten to analyze chromi-um and heavy metal pollution in Jersey City, N.J.“Our Keck Geoenvironmental EngineeringLaboratory has specialized analytical tools thatenable us to do basic work on these as well asassess new remediation techniques,” saysChristodoulatos.

Sometimes, esoteric research provides payoffs formore down-to-earth problems. For several years, CESresearchers developed ways to treat wastewater inspace. “The problem to do it without the huge buffers— the atmosphere and oceans — we have on earth,”says Christodoulatos. The answers gave CES powerfulinsights into ways to purify water in environments asdiverse as the Everglades and the Middle East.

Several CES inventions have spawned businesses.CES engineers pioneered a way to modify the surface ofnanoscale-sized particles of titanium dioxide, a whitepigment, to absorb arsenic. “This material is now usedin commercial water filters,” says Christodoulatos. “Wethink we can extend the approach to lead, chromium,cadmium, and other heavy metals.”

A second invention, a plasma system that operates

“ Our goal is totake away aneasy way for

terrorists to passsecrets to one

another.”

– Dr. RajarathnamChandramouli

Opposite: Dr. RajarathnamChandramouliLeft: Dr. ChristosChristodoulatos.

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at room temperature without a vacuum,could find uses as diverse as air purifica-tion in hospitals and protection againstchemical and biological terrorism.

New research includes small systemsthat create powerful oxidants used todestroy bacteria and other organic con-taminants in water. “Instead of shippingtoxic chlorine, we’re looking at small, effi-cient generators that make oxidants on-site, where and when we need them,”explains Christodoulatos. “That reducesour potential exposure to toxic chemicals.”

By combining fundamental research with engi-neering, CES has become a recognized leader in newenvironmental technologies.

Dr. Frank Fisher: Next-Generation Composite Materials“From a research perspective,” says Dr. FrankFisher, an assistant professor of MechanicalEngineering, “in nanotechnology we’re interested in

taking advantage of novel properties that areavailable at the nanoscale that aren’t available atlarger scales.”

Fisher’s primary research area is the mechanicalmodeling of polymer nanocomposites with a focus oncarbon nanotube-reinforced polymers (NRPs). Sincetheir discovery in the early 1990s, carbon nanotubes(CNTs) have excited scientists and engineers withtheir wide range of unusual physical properties.

These properties are a direct result of the near-perfect microstructure of the CNTs, which at theatomic scale can be thought of as a hexagonal sheetof carbon atoms rolled into a seamless, quasi-one-dimensional cylindrical shape. Besides theirextremely small size (single-walled carbon nan-otubes can have diameters 100,000 times smallerthan the diameter of a human hair), carbon nan-otubes are half as dense as aluminum, have tensilestrengths 20 times that of high strength steel alloys,have current carrying capacities 1,000 times that ofcopper, and transmit heat twice as well as pure dia-mond. Given these unparalleled physical properties,

CNTs offer the potential to create anew type of composite material withextraordinary properties.

“So what my research is inter-ested in looking into,” says Fisher,“is how to take these nanotubes asa reinforcing material and add theminto a polymer matrix, in order tocome up with nanocomposite mate-rial; and not only are we interestedin improving mechanical properties,but also electrical and thermalproperties. And the ultimate goal isreally to be able to create multi-functional materials where we candesign the mechanical, electricaland thermal properties that wewant for various applications.”

One aspect of this work is thedevelopment of enhanced modeling

methods and corresponding experi-mental techniques to describe theeffective mechanical behavior of thesesystems.

For example, due to the extremelysmall size of the embedded nanotubes,a polymer interphase region forms inthese systems with mechanical proper-ties that are different from the proper-ties of the bulk polymer matrix. Due tothe extremely large surface area of theembedded nanotubes, this interphaseregion can comprise a significant por-tion of the volume fraction of the com-posite and significantly influence theoverall mechanical properties of thecomposite.

“I think we’re talking about disruptive sorts ofinstruments and capabilities that will have a verysignificant economic impact for those nations andthose entities that achieve these developments,”says Fisher, “and I think that’s why we’re seeing theUS make a strong push as far as investing in nan-otechnology – because the really large payoutsaren’t necessarily going to be within the next one tothree years; it’s going to be a longer time-frame ofinvestment in technology R&D.”

Julie Harrison: The Art of Technology,the Technology of ArtFrom its perch above the Hudson River, StevensInstitute of Technology overlooks the art capital of theworld. New York City is home to many of the world’sleading artists and a showplace for their works andperformances. Now Stevens is building a bridge to con-nect that world with its own emerging technologies.

As Director for Stevens’ new Art & Technology pro-gram, Julie Harrison wants to introduce artists to newtechnologies under development at Stevens. She expectsto find a receptive audience. From sculptors switching tometal chisels to carve stone to architects embracing ironand steel to create soaring towers, artists have always

rushed to embrace new technologies. Today, they have far more choices. In addition to

paint, stone, and metal, artists work with video, digi-tal imaging, animation, and the Internet. These newmedia let them shape color, form, perspective andsound as well as time itself.

The new Art & Technology program gives them anopportunity to stretch this palette of technologies,says Harrison. At Stevens, they can collaborate withresearchers in such highly specialized disciplines asrobotics, biotechnology, nanotechnology, virtual real-ity, aerodynamics, artificial intelligence, lasers andcomposites.

This fascination with technology mirrorsHarrison’s own background. She has always pursuedemerging technologies. “My undergraduate artdepartment was very traditional and totally unin-terested in video, so I found a way to do it in thedance department,” she relates.

Armed with the first lightweight video recorder,a 10-pound black-and-white Sony Portapak,Harrison ventured into the world of performanceart, installations and interactive environments.From there, she turned to video image processing,digital imaging and design. Over the years, she hasexhibited her own works, directed documentaries,

Left: Dr. Frank FisherAbove: Professor JulieHarrison.

“ I think we’retalking about

disruptive capabilities that

will have a verysignificant

economic impact.”

– Dr. Frank Fisher

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and designed books and websites. She began teaching at Stevens in

1992 and launched the Art & Technologyprogram in 2004. What makes it unlikeany other art program in the metropoli-tan area is the collaboration it fostersbetween engineers and artists.

“The people inventing things atStevens are interested in research inways that are similar to how artistsexperiment with ideas. We want to bringtop artists here to collaborate withthem,” she says.

The large bioactive sculptures doneby artist-in-residence Jackie Brooker exemplifiesthis collaborative vision. Working with recycledplastics processed by Dilhan Kaylon of the StevensHighly Filled Materials Institute, Brooker is creatinglarge, porous, moss-containing sculptures thatscrub polluted rain and wastewater.

Technology and engineering students may also

benefit from such artistic collaborations. “As moreand more jobs move overseas, it is increasinglyclear that an engineering degree, by itself, is notenough to ensure success,” says Harrison.

“Students need to be creative, not just aboutengineering and technology, but about the broadercultural aspects of their solutions. It’s the differ-ence between creating another mp3 player and aniPod,” Harrison concludes.

Ann Mooney: Executive DecisionWhen corporate executives clash, what spells thedifference between smarter decisions and angryfinger pointing?

“In constructive conflict, leaders with differentideas exchange views and build on them,” explainsAnn Mooney, an assistant professor at The HoweSchool of Technology Management who studies thebehavior of top managers. “Destructive conflict ismore personally and emotionally driven.

“The problem is that the same factors thatencourage constructive conflict also encouragedestructive conflict, and it’s so easy to slip fromthe one to the other,” says Mooney.

Many companies, she explains, try to cultivate cre-ativity by forming large teams to gather diverse opinions.“Unfortunately, large teams also make it more difficultto get your opinions heard and to get things done. Thatcan lead to personality clashes,” says Mooney.

Even companies where productive dialog is therule must guard against corrosive friction. Topmanagers have different skills and corporateresponsibilities, she explains. These differencesmake it easy for constructive conflict to turndestructive because team members may misinter-pret and question each other’s motives.

“We’re looking at strategies to break thiscycle,” says Mooney. One possibility may be toteach strong-willed executives to express them-selves in less contentious language.

Another is to hold all members accountable forteam decisions. “If team results affect how the com-

pany regards both our performances, then I’m going toconsider your viewpoint and trust that you will listen towhat I have to say,” she explains.

If conflict remains a smoldering issue amongmanagement, its embers have all but died in theboardroom. “There’s very little debate going on,”says Mooney. “Enron, WorldCom and other scandalsprovide real evidence that directors should havebeen evaluating executive actions more closely.We’re only just starting to explore how to createmore constructive conflict at the board level,” shesays.

Mooney has created a checklist of strategies thatcan be used to encourage constructive conflict. “Thenew Sarbanes-Oxley regulations offer suggestionslike encouraging more outsiders, but they onlyscratch the surface,” she says. “In fact, boards likeEnron and WorldCom complied almost perfectlywith the regulations, yet they clearly were asleep atthe wheel.”

“Boards need to select directors that have thetime, expertise, and personality to contribute toboardroom discussions,” she continues. “They can setthe stage for productive meetings by providing direc-tors with meaningful advance materials and allowingtime on the agenda for open discussion.”

Board chairs must take positive actions toencourage constructive debate. “When facilitatingmeetings,” says Mooney, “the chair should ensurethat all directors speak up, because sometimes oneor two directors dominate discussions. Simplestrategies like assigning one director to be devil’sadvocate or inviting individuals directly involvedwith issues can go a long way towards ensuring bet-ter decisions.”

Most important of all, directors should hold somesessions without the CEO present. “They may be moreinclined to disagree with proposals when he or she isnot present,” she says.

In short, Mooney warns, “Companies that want toensure top performance need to look at how they man-age constructive conflict at the board level.”

John Nastasi: Redesigning DesignHow can visitors to the supersonic Concorde passengerjet at New York City’s Intrepid Sea-Air-Space Museumsense what it looked like in flight?

That is one of the many questions students grapplewith in John Nastasi’s new Product-Architecture grad-uate program. By alloying architecture and industrialdesign with engineering and technology, the programprepares students to use technology to free theirimagination.

The program grew out of Nastasi’s own search fornew perspectives. After practicing architecture inHoboken for 12 years, Nastasi returned to Harvard tostudy advanced design. There, he learned to integratedata, electronic technologies and media with tradi-tional design and architecture.

“Before I left, a colleague told me not to go backunless it changed how I designed,” Nastasi recalls.Burning with new ideas, Nastasi joined Stevens todevelop a course that he calls “the equivalent of sys-tems engineering for designers.”

The core of the Product-Architecture programNastasi developed with Associate Dean of EngineeringSouran Manoochehri rests on three legs: advancedmodeling of geometric objects (and associated data)

Opposite: Dr. Ann MooneyAbove: Professor John Nastasi.

“ The same factors that

encourage constructiveconflict also

encouragedestructive

conflict.”

– Dr. Ann Mooney

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and their interrelationships, the use ofsimulation software to predict results, andoptimization of simulation results.

The new methodology enables design-ers to explore not only physical aspects oftheir design, but their informational con-tent as well. “Nothing is static any more,everything involves feedback and rela-tionships,” Nastasi explains. “We’re put-ting engineering methodologies in thehands of designers so they can make thoserelationships part of their design.”

The approach shines in student designs for a pavil-ion to house the Concorde. The Intrepid Museum origi-nally asked Associate Dean of Engineering KeithSheppard and Professor Dimitri Donskoy to find a wayto prevent the aircraft from corroding. They askedProduct-Architecture students to design a structure toprotect the aircraft.

Rather than build a conventional housing, thestudents first modeled the aircraft. Using compu-tation fluid dynamics, they simulated the airflowsas it took off, broke the sound barrier and cruisedat supersonic speeds.

“The design students said we needed to make thescientific information publicly accessible,” saysNastasi. “So they designed the enclosure based on theair forms around the plane during flight.

“Even when the plane is sitting still, you can under-stand its condition in flight. They’re also developing aperformance piece with mist projectors so you can seethe change in the air as it skims the aircraft and hearthe boom as it breaks the sound barrier.”

The Product-Architecture Lab abounds with sim-ilar concepts. On one table are a pair of surfboardsthat optimize their shape for individual surfers. Onanother sits a lightweight quick-release racing carwheel rim. Across the room is a design for a churchapse whose custom framing system automates theconstruction of graceful domes.

“Just give design students analysis tools andthis is what happens,” says Nastasi.

Rebecca Wright: Privacy in the Age ofDatabasesWalk into a store and charge a purchase on a creditcard, and that transaction is instantly stored in mul-tiple databases. The same is true of transactionsinvolving our checking accounts, supermarket pur-chases, health history, utility fees, tax payments,voter registration, and many other personal decisions.

If someone put all this information together, howmuch privacy would we really have? Is there a way toshare some of this data legitimately without reveal-ing information that should remain private?

These are some of the questions AssociateProfessor of Computer Science Rebecca Wrighthopes to answer.

“There’s a growing proliferation of data aboutindividuals today,” Wright explains. “Networkedcomputing has made it much cheaper to collect

data, and that data has a lot of utility.” Such data has many positive uses,

Wright explains. The government wantsto use it to uncover terrorist threats.Companies want to market more effi-ciently, improve service and predictfraud. Medical researchers hope toaccess millions of medical histories tounearth hidden clues to disease preven-tion and cure.

The problem, says Wright, is that thesame information can be assembled intohighly detailed medical, financial,lifestyle and political profiles of individ-uals, invading privacy in ways that wouldhave been inconceivable in the past.

Many organizations try to obscurepersonal information. “The US CensusBureau, for example, suppresses publi-cation of data about small towns thatwould let someone infer the profits of a local com-pany or the income of the renter who lives in a twobedroom apartment and commutes more than 50miles to work,” says Wright.

“Yet people can often successfully identifyindividuals by cross-referencing Census data, voterand automobile registrations, and other types oflists,” she continues. “We need to find ways to bal-ance utility with privacy.”

Wright is working on ways to restore this balancethrough the PORTIA (Privacy, Obligations, and Rightsin Technologies of Information Assessment) project.In addition to Stevens, collaborators includeStanford University, Yale University, New YorkUniversity, University of New Mexico, and govern-mental and industrial partners.

In addition to developing a framework to discussprivacy policy, PORTIA is also looking for better tech-nologies to handle sensitive information.

The research of Wright and her students focuseson ways to allow two or more parties to processdata collaboratively without revealing the data to

anyone. She describes it as “sharing data withoutactually sharing it.”

Some of her schemes involve breaking the com-puting into discrete steps so that each computerdoes some of the calculations, then sends the infor-mation to another computer for additional mathe-matical processing. “This doesn’t just protect a per-son’s name, but protects all their personal informa-tion and data,” says Wright.

Wright’s goal is make the solutions practicalenough to become part of the everyday infrastructure.“Privacy is important, but you have to be careful oryou’ll get solutions no one wants to use,” she says.

Yan Meng: Reconfigurable Platforms atthe Embedded Systems and Robotics LabEmbedded systems are application-specific com-puting systems which contain both hardware andsoftware tailored for a particular task and are gen-erally part of a larger system. They are almosteverywhere in our lives, in cell phones, cars, wash-ers, TVs, printers, digital cameras and commonrobotics.

Opposite: Dr. Rebecca WrightAbove: Dr. Yan Meng withstudent.

“ We need tofind ways to

balance utilityand privacy.”

– Dr. Rebecca Wright

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Embedded systems often fall underthe category of reactive and real-timesystems, meaning they contain sensors orsimilar elements which constantly inter-act with the external environment andmust compute certain results or take cer-tain actions within their environmentthrough actuators in real-time, withoutdelay, as in the case of mobile robots.

“Generally speaking, my currentresearch interests include real-timeembedded intelligent systems and

robotics,” says Professor Yan Meng of theDepartment of Electrical and Computer Engineering.

“My students and I work on research projectssuch as a self-reconfigurable embedded-systemplatform using System-on-Chip technology,” shesays. “Basically, a real-time complex system – forexample, an autonomous mobile robot – mustadapt to highly dynamic environments and emer-gencies under real-time constraints.”

A significant amount of processing power isneeded for such complex applications. Theresources in the embedded general processors aretypically very limited, which imposes significant

challenges for software development.“Instead of pushing the limit of software

design,” says Meng, “we turned our attention toreconfigurable hardware and developed a dynam-ically reconfigurable embedded-system platformby integrating Field Programmable Gate Arrays, orFPGA, and embedded processors in a system-on-chip environment.”

This new platform can dramatically reduce theoverall system responding time and greatlyincrease the system robustness and fault-toler-ance, and is in the process of implementation in amobile robot, Pioneer 3DX, in the EmbeddedSystems and Robotics Lab. Meng is also seeking toextend this reconfigurable platform to the designof intelligent computing systems and devices,which can adapt to environments through self-learning.

Her ongoing research projects on robotics includemulti-robot coordination and communication. Multi-robot teams are desirable in some scenarios, such asplanetary exploration or urban search and rescue.Multi-robot systems are more advantageous than asingle expensive robot in several ways, includingattributes such as parallelism, robustness, scalability,

and simpler programmingfor each unit. Withacquired multiple roboticsystems, managing thecommunication, dynamictask allocation and coop-eration among multi-robots becomes challeng-ing.

“Our research focuseson building an optimiza-tion model of multi-robotcooperation, as well asdynamic task allocationunder good or bad com-munication situations,”says Meng.

John Horgan: A Center forScience Writings at StevensUnder the direction of noted sciencejournalist John Horgan, an Institute-wide Center for Science Writings and aprogram of Communications across theCurriculum were inaugurated this fall.The multi-dimensional Stevens Centerfor Science Writings will contribute toStevens’ growing reputation as a lead-ing cultural hub in the New York Metroarea. In addition to directing the center,Horgan will also teach one undergradu-ate class each semester.

Horgan has written three widelyreviewed books: The End of Science(1996), a bestseller translated in 13languages; The Undiscovered Mind(1999); and Rational Mysticism (2003).He taught science journalism atPolytechnic University and has twoScience Journalism Awards from the AmericanAssociation for the Advancement of Science.Horgan also garnered the National Association ofScience Writers Science-in-Society Award. He hasserved as an editor and writer for the IEEE Spectrumand senior writer at Scientific American, with manyfreelance publications to his credit.

As a longtime freelance writer, Horgan enjoyshaving an office on the Stevens campus. “As awriter, at least for me, it’s really important tobounce ideas off other people, to hear what theyhave to say and have them tell me what they’reworking on,” he said. “About a year ago I reallystarted thinking about getting a job at a universityto get that intellectual companionship.”

Though the Center for Science Writings is still inits infancy, Horgan looks forward to the challengeof creating the program from the ground up and hasambitious plans for its future. He aims to holdevents on campus that will spark debate and piqueinterest, while bringing together the media, scien-

tific experts and the Stevens community. “All the students at Stevens should care about

these broader scientific issues, and Stevens shouldshow that it cares about these sorts of issues,” hesays. “Stevens should care not only about theissues themselves but also about how they are dis-cussed in the media. That’s something that’s been abig concern of mine – that the media sometimesget their coverage of certain scientific issueswrong.”

Anticipated events include lectures, confer-ences and roundtable discussions of timely sci-ence-related topics. “Lecturers would talk abouthow science is presented and address importantscience-related issues such as global warmingand also how science relates to areas such asnational security, stem cell research and so on.” Inthe future, Horgan envisions the center as aprominent fixture on campus that will encourageexperts in the field of science to make Stevens oneof their stops.

Above: Center for ScienceWritings Director John HorganOpposite: Horgan hosts apanel of prominent sciencewriters at Stevens. Left toright: Sharon Begley, TThheeWWaallll SSttrreeeett JJoouurrnnaall; JohnRennie, editor-in-chief,SScciieennttiiffiicc AAmmeerriiccaann;Horgan; and StevePetranek, editor-in-chief,DDiissccoovveerr.

“ A real-timecomplex system

must adapt tohighly dynamic

environments andemergencies.”

– Dr. Yan Meng

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Report of the Treasurer and Chief Financial Officer 53

Report of Independent Certified Public Accountants 56

Consolidated Financial Statements

Statement of Financial Position 57

Statement of Activities 58

Statement of Cash Flows 59

Notes to Consolidated Financial Statements 60–77

Report of the Treasurer and Chief Financial Officer

Ever since I joined Stevens Institute of Technology twelve months ago, I have been impressed with this intellectually vibrant Institution,constantly growing and developing in unique areas of research. Over the past 10 years, it has truly leveraged the outstanding qualityof its faculty and student body into the impressive accomplishments in instruction and research described here by President Ravechéand Chairman Babbio.

That this Institution managed to accomplish so much from an objectively small endowment and financial base is testimony to theingenuity and resourcefulness of its community. Following this first phase of growth and expansion is a necessary focus on leveragingthose gains and establishing even broader recognition while remaining cognizant of the major financial issues concomitant with thisrapid growth. These issues include a small capital base with an endowment and accumulated gains of $130M, minimal borrowingcapacity combined with significant debt service and the need to improve operating results to comfortably cover depreciation. In addi-tion, there is a need for our financial administration to develop and improve if it is to keep pace with the rest of the Institution. I wasbrought on board to address these issues and help bring about their resolution while bringing greater transparency to Stevens’ finan-cial management.

I am glad to report that this process is well underway, as officially recognized by Moody’s Investors Service when it recently affirmedour Baa2 credit rating and stable outlook. I believe the Fiscal 2005 results published here confirm this positive trend, as highlightedin more detail in the following paragraphs.

Summary of Financial PositionIn Fiscal 2005, Stevens has strengthened its financial position. The Consolidated Statement of Financial Position, on page 57, showsthat total net assets were approximately $187.5M at June 30, 2005, an increase of $6.1M or 3.4%, from the prior year. Especially sig-nificant are its continued strength in investments, with an increase of over $10M, and an increase of over $16M, net, in the physicalplant (including land, buildings and equipment), reflecting the continuing process of major campus renewal.

On the liabilities side, long-term debt increased by $10.4M. This represents the net impact of the normal payoff of outstandingdebt principal, offset by the issuance in July 2004 of a $13.3M fixed rate bond issue to fund the renovation of four existing Institute-owned buildings into the new River Street Dorm complex. With the completion of this project, Stevens will have accomplished the corecampus renewal initiated several years ago that is described by Chairman Babbio on page 3.

On the operating side, the year marked progress towards the goal of improving the financial situation of the Institute. TheConsolidated Statement of Activities on page 58 shows essentially break-even operations before a depreciation charge of $4.8M. Thismay be compared with a $1.2M surplus before a depreciation charge of $4.8M in the prior year. When evaluating these numbers itshould be noted that Fiscal ’04 was positively affected by an unusually large unrestricted bequest to the Institute. Net of one-timelarge contributions, Fiscal 2005 operating results reflect an improving trend.

It is our firm intention to further improve operating results over the next three fiscal years so that revenues will cover all operat-ing expenses, including depreciation. This goal, though ambitious, can be achieved over the next several fiscal years with close atten-tion to cost containment, organic growth of key operating revenues and careful re-allocation of existing financial resources to sup-port Stevens’ strategic objectives. Accomplishing this will require collaboration and support across the entire Institute but will enableStevens to continue its pattern of growth over the next decade.

Endowment and related investmentsThe market value of investments in the endowment and related investments totaled $130,159,592 at June 30, 2005, compared to$120,063,929 at June 30, 2004, an increase of $10,095,663 or 8.4%.

Our investments are managed to maximize total investment return relative to appropriate risk, as further explained by InvestmentCommittee Chair Harold Wilmerding in the accompanying box. The ending market value is affected by three factors: market gains orlosses, gifts to endowment and the distributions authorized by the Board to support operations or specific needs of the Institution.

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The table below tracks beginning market value of the endowment, gift additions and distributions and net gains over the Fiscal1998 – Fiscal 2005 period (source: audited cash flow statements).

Endowment & Similar Funds 1998 1999 2000 2001 2002 2003 2004 2005

Beginning Market Value 124,264,389 133,147,657 142,838,338 157,545,642 135,548,366 114,218,919 113,102,216 120,063,929**

Proceeds from Sales of Investments:Distributions (3,285,525) (4,813,572) (6,230,410) (7,637,080) (8,854,027) (8,418,674) (7,681,517) (5,218,969)Other Proceeds (130,503,833) (93,416,526) (46,599,208) (74,346,039) (99,084,972) (23,102,106) (54,520,082) (19,830,819)

Subtotal Proceeds (133,789,358) (98,230,098) (52,829,618) (81,983,119) (107,938,999) (31,520,780) (62,201,599) (25,049,788)Purchases of Investments:

Gifts 3,004,407 1,207,607 7,248,672 6,821,228 2,958,548 300,414 1,085,686 3,112,639 Other Purchases 129,629,310 97,604,695 45,332,575 68,988,843 97,058,615 29,796,029 54,849,446* 20,490,928

Subtotal Purchases 132,633,717 98,812,302 52,581,247 75,810,071 100,017,163 30,096,443 55,935,132 23,603,567Net Gain / (Loss) 10,038,909 9,108,477 14,955,675 (15,824,228) (13,407,611) 307,634 14,870,441 11,541,884 Ending Market Value 133,147,657 142,838,338 157,545,642 135,548,366 114,218,919 113,102,216 121,706,190 130,159,592 (*): Amount includes reclassification of $2.1M of artwork contributed in FY’03.(**): Amount reflects reclassification of $1.6M in investments to other assets.

As can be seen from this table, Stevens’ investments performed quite well for most of the period, with significant gains in the years leading tothe peak of the so-called high-technology “bubble” (Fiscal 2000), as well as in the two most recent fiscal years, 2004 and 2005. The only excep-tions are Fiscal 2001, 2002 and the first half of Fiscal 2003, where investment losses coincided with a period of adverse conditions in the capitalmarkets, which affected investments across the nation. Still, net gains added to a total of over $31.6 million to our investments over this 8-yearperiod: this represents an increase of 25.4 % over the market value of Stevens’ investments at the beginning of Fiscal 1998.

The 3-year trailing average distribution rate for Fiscal 2005 was roughly1 equal to 5.4% of the average market value of investments over thethree prior fiscal years. This was unchanged from Fiscal 2004. Over the Fiscal 2000-2004 period, however, the draw was augmented by a specialdistribution authorized by the Board of Trustees to fund the Stevens capital fund raising campaign. Thus, the overall authorized distribution forthe ’00-’04 period was higher than the 5.4% trailing 3-year average.

The chart below illustrates this overall distribution as a percent of the beginning market value of our investments over the Fiscal 1998 - Fiscal2005 period, and compares it with the 3-year trailing average for the same period. As can be seen from the chart, the distribution rate on a spot

basis was lower than the 3-year average for FY’98 through FY’01, and higher for FY’02 through FY’04. This period marked a significant increase inthe use of financial resources, concomitant with the accomplishment of important institutional and fund-raising objectives authorized by theBoard of Trustees. Having accomplished most of these objectives, we have now entered a period of significantly reduced distribution, consistentwith our need for financial equilibrium. Thus the Fiscal 2005 spot distribution rate was the lowest since Fiscal 1999.

Changes in Financial Administration and ReportingThe past 12 months have also been dedicated to developing our financial administration and improving our financial reporting andanalysis. As we continue to draw upon existing strengths in our financial organization, the financial team has been restructured aroundthe key positions of Controller and Associate Controller, while several additional appointments in the course of the past year have broughtfresh talent. In August we also created a new position of Institute Auditor, reporting to the Audit Committee of the Board of Trustees and withadministrative reporting relationship to me. Additionally, in December, the Office of Sponsored Research has been moved organizationally tothe VP for Finance area to emphasize its administrative accountability and compliance functions, and a staffing plan is being implemented toenable this key branch of the administration to keep pace with the growth of university research.

Over the past year we also engaged in an in-depth review of all Institute policies and procedures, in close collaboration with theacademic and administrative leadership, to keep up with the changing regulatory environment and the increasing complexity ofInstitute operations. This ongoing project has already resulted in extensive revisions of existing policies and the introduction of sev-eral new ones in such diverse areas as accounting, federal regulatory compliance and controls. All policies are accessible through anew policy portal on our website, and personnel are being trained in their implementation.

We are dedicated to improving not only the quantity but also the quality of financial reporting at Stevens. We are especially com-mitted to a continuous improvement of our communication with and outreach to our community of faculty, students, alumni, friendsand supporters. Our new financial web site contains valuable information, including our audited financial statements, endowmentvalue and trends and exhaustive information on our long term debt. It is frequently updated and should prove an important resourcefor anyone wishing to gain insight into the financial picture at Stevens.

I am confident that with continued growth, clear and sound financial policies and procedures, exceptional talent and a unique tra-dition, our Institution is well positioned to consolidate and expand its reputation as a steeple of education and research.

Respectfully submitted,

Stefano FalconiVice President of Finance, Treasurer and Chief Financial OfficerFebruary 8, 2006

The Management of Stevens’ InvestmentsA message by Investment Committee Chair Harold P. Wilmerding

The Investment Subcommittee of the Finance Committee of the Board of Trustees is charged with the responsibility and the authority to manage theInstitute’s investments, primarily restricted and unrestricted funds comprising the endowment. The Committee meets regularly, formally once a month, but inaddition communicates by phone or e-mail as required to prepare for meetings or to follow up afterwards. The Committee is supported actively both by the Officeof Finance and by external financial advisors in order to consider both the immediate requirements of the Institute and longer term goals to optimize investmentreturns and the preservation of capital. The Committee allocates funds among external established managers and partnerships and monitors their performancemonthly against benchmark rates of return, adherence to defined styles and audited financial information.

The operating policy of the Committee closely follows accepted standards for investment managers and gives considerable emphasis to maximum total returnstrategies. As is the convention, Stevens follows a “spending rate” policy, which is a bi-annual transfer of assets from endowment gains to support the operat-ing budget of the Institute. The specific amount is determined by taking a defined percentage of the average of the trailing 3 years of endowment value. Thespending rate for Fiscal 2005 was 5.4%.

Given the modest size of the endowed funds relative to the current operating and capital requirements, the Committee continues to diversify against risk. Althoughthere is limited flexibility to pursue illiquid but potentially higher return forms of investment often found in larger endowments, the Committee is opportunistic and hasutilized alternative investments to an advantage. The sectors and asset classes to which the investments are committed are as follows: fixed income (10-15%), equi-ties (20-40%), alternative investments (20-35%), private equity (10-15%) and cash equivalents (3-5%). These asset allocations are reviewed and adjusted annually.

In conjunction with the Finance Subcommittee, the Investment Committee meets with the Office of Finance throughout the year to review the outlook againstwhich its policies and procedures are established.

1The Stevens endowment is comprised of a subset of funds received as a gift gift by the Taylor Foundation and referred to as the Taylor Trust Funds. The draw for these funds follows a somewhat different rule whichwas established by Stevens in accordance with the wishes of the Taylor Trust Foundation upon acceptance of the gift (20% of income generated by investments). The actual draw on any fiscal year is affected bythe combination of this rule and the 5.4% rule.

4 . 3 %

6 . 8 %

7 . 4 %

6 . 5 %

4 . 4 %

3 . 6 %

2 . 6 %

4 . 8 %

0 . 0 %

1 . 0 %

2 . 0 %

3 . 0 %

4 . 0 %

5 . 0 %

6 . 0 %

7 . 0 %

8 . 0 %

1998

1999

2000

2001

2002

2003

2004

2005

$

3-yr trailing avg. rate:

FY'98=6.0% FY'99=5.75%

FY'00=5.5% FY'01-05=5.4%

Endowment and related Investments Draw as % of End. Market Value3-yr trailing avg. and spot

Fiscal Year

Spot Distribution Rate, All-In (% of FY beginning MV) Trailing 3-yr Distribution Rate

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Stevens Institute of TechnologyConsolidated Financial StatementsJune 30, 2005

(with summarized comparative information for 2004)

Statement of Financial Position22000055 22000044

AAsssseettssCash $ 1,513,202 $ 26,774 Student, research and other receivables, net 22,794,143 22,858,500 Contributions receivable, net 10,124,125 18,019,699 Prepaid expenses and other assets 4,129,671 3,699,397Investments 130,159,592 120,063,929Trusts held by others 2,002,596 1,976,219Deposits with bond trustees 25,543,013 31,831,717Land, buildings and equipment, net 116,758,226 99,762,078

Total assets $ 313,024,568 $ 298,238,313

LLiiaabbiilliittiieess aanndd NNeett AAsssseettssLiabilities

Lines of credit $ 11,820,171 $ 8,620,890 Accounts payable and accrued expenses 9,465,254 13,545,190Deferred revenue and deposits 2,120,191 2,397,062 Annuities payable 2,775,098 2,772,661Accrued post-retirement benefit

obligations 11,874,911 12,554,238 Long-term debt 82,311,070 71,927,407 Refundable advances 5,131,056 5,022,103

Total liabilities 125,497,751 116,839,551

Net assetsUnrestricted 76,758,277 70,767,957Temporarily restricted 15,215,547 19,614,711Permanently restricted 95,552,993 91,016,094

Total net assets 187,526,817 181,398,762Total liabilities and net assets $ 313,024,568 $ 298,238,313

To the Board of Trustees of Stevens Institute of Technology:

We have audited the accompanying consolidated statement of financial position of Stevens Institute of Technology (the "Institute")as of June 30, 2005, and the related consolidated statements of activities and cash flows for the year then ended. These consolidat-ed financial statements are the responsibility of the Institute’s management. Our responsibility is to express an opinion on these finan-cial statements based on our audit. The prior year summarized comparative information has been derived from the Institute’s 2004consolidated financial statements, which were audited by other auditors, whose report dated July 29, 2005, expressed an unqualifiedopinion on those consolidated financial statements.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America as established bythe Auditing Standards Board of the American Institute of Certified Public Accountants and the standards applicable to financialaudits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free ofmaterial misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit pro-cedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theInstitute’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on atest basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting prin-ciples used and significant estimates made by management, as well as evaluating the overall consolidated financial statement pres-entation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated finan-cial position of Stevens Institute of Technology as of June 30, 2005, and the consolidated changes in their net assets and their cashflows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

New York, New YorkFebruary 8, 2006

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C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S

Statement of Cash Flows2005 2004

Cash flows from operating activitiesChanges in net assets $ 6,128,055 $ 8,488,003

Adjustments to reconcile changes in net assets to net cashused in operating activities

Depreciation expense 4,776,430 4,762,273Loss(gain) on disposal of property 674,883 (2,970,704)Write-off of furniture, fixtures and equipment - 750,461Net gain on investments (11,541,884) (14,870,441)Present value adjustment on annuities payable 32,560 (234,861)Provision for doubtful accounts 540,773 2,822,966Contributions restricted for long-term investments (1,312,909) (2,977,514)Changes in assets and liabilities

Decrease (increase) in receivables 7,419,158 (6,904,198)(Increase) decrease in prepaid expenses and other assets (430,274) 237,038(Decrease) increase in accounts payable and accrued expenses (5,724,166) 5,812,121Decrease in deferred revenue and deposits (276,871) (3,221,796)Decrease in accrued post-retirement benefit obligations (679,327) (122,406)

Net cash used in operating activities (393,572) (8,429,058)

Cash flows from investment activitiesProceeds from sales of investments 25,049,788 62,201,599Purchases of investments (23,603,567) (53,797,098)Proceeds from disposal of property - 3,450,000Purchases of property, plant and equipment (20,803,231) (24,131,142)Decrease in deposits with bond trustees 6,288,704 20,082,707

Net cash (used in) provided by investing activities (13,068,306) 7,806,066

Cash flows from financing activitiesProceeds from contributions restricted for long-term investments 1,312,909 2,977,514Borrowings under line of credit 3,199,281 4,205,107(Decrease) in payable to custodian - (3,326,053)(Increase) decrease in trusts held by others (26,377) 5,737Increase in annuities payable 259,081 869,497Payments of annuity obligations (289,204) (115,035)Proceeds from long-term debt 13,265,000 1,260,017Payments on long-term debt (2,881,337) (5,362,649)Increase in refundable advances 108,953 108,953

Net cash provided by financing activities 14,948,306 623,088

Net increase in cash 1,486,428 96Cash

Beginning of year 26,774 26,678End of year $ 1,513,202 $ 26,774

Supplemental disclosure of cash flow information

Cash paid during the year for interest $ 4,915,679 $ 4,001,698

Statement of ActivitiesTTeemmppoorraarriillyy PPeerrmmaanneennttllyy TToottaallss

UUnnrreessttrriicctteedd RReessttrriicctteedd RReessttrriicctteedd 22000055 22000044OOppeerraattiinngg AAccttiivviittiieess

Revenues and other supportTuition and fees $ 78,052,472 $ - $ - $ 78,052,472 $ 69,765,437 Less student aid (20,739,643) - - (20,739,643) (18,638,286)

Net tuition and fees 57,312,829 - - 57,312,829 51,127,151Research revenues

Direct 26,301,429 - 26,301,429 26,819,506Indirect 5,509,969 - - 5,509,969 5,275,480

Total research revenues 31,811,398 - - 31,811,398 32,094,986Non-research grants 2,476,978 - - 2,476,978 1,563,732Contributions 5,482,652 1,822,812 - 7,305,464 9,541,415 State of New Jersey appropriation 1,196,723 - - 1,196,723 1,139,239 Other revenues 1,237,109 - - 1,237,109 1,656,318 Auxiliary enterprises 14,234,178 - - 14,234,178 12,656,820Investment return in support 5,514,544 - - 5,514,544 6,338,569

of operationsNet assets released from restrictions 5,900,409 (5,900,409) - - -Total operating revenues andother support 125,166,820 (4,077,597) - 121,089,223 116,118,230

ExpensesInstruction 39,584,084 - - 39,584,084 35,298,593Research 28,269,936 - - 28,269,936 27,922,311Academic support 6,957,023 - - 6,957,023 5,812,790Library 1,383,084 - - 1,383,084 1,527,499Student services 11,744,599 - - 11,744,599 10,102,091Public services 1,123,481 - - 1,123,481 1,534,422General institutional support 19,585,344 - - 19,585,344 20,508,622Development 1,541,947 - - 1,541,947 1,960,137Public relations 806,084 - - 806,084 1,296,905Auxiliary enterprises 10,294,100 - - 10,294,100 8,917,031 Total expenses before

depreciation 121,289,682 - - 121,289,682 114,880,401Net operating activities before

depreciation expense 3,877,138 (4,077,597) - (200,459) 1,237,829Depreciation expense (4,776,430) - - (4,776,430) (4,762,273)

Net operating activities afterdepreciation expense (899,292) (4,077,597) - (4,976,889) (3,524,444)

NNoonn--ooppeerraattiinngg aaccttiivviittiieessInvestment return in excess of

amounts authorized for use inoperations 5,749,978 178,007 3,510,044 9,438,029 10,734,254

Contributions 50,974 43,578 978,755 1,073,307 1,241,110Private grants 2,000,000 - - 2,000,000 -Gain(loss) on disposal of property (674,883) - - (674,883) 2,970,704Other losses (236,457) (17,876) - (254,333) (70,689)Provision for uncollectible contributions

receivable - (444,616) - (444,616) (3,105,107)Minority interest - - - - 7,314Present value adjustment on annuities

payable - (80,660) 48,100 (32,560) 234,861Net non-operating activities 6,889,612 (321,567) 4,536,899 11,104,944 12,012,447

Changes in net assets 5,990,320 (4,399,164) 4,536,899 6,128,055 8,488,003Net assets

Beginning of year 70,767,957 19,614,711 91,016,094 181,398,762 172,910,759 End of year $ 76,758,277 $ 15,215,547 $ 95,552,993 $ 187,526,817 $ 181,398,762

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Refundable advances represent obligations of the Institute to the Federal Government under the Federal Perkins Loan Program.

Investment returns including gains or losses on investments are reported as follows:• as increases (decreases) in permanently restricted net assets if the terms of the gift

require that they be added to the principal balance;• as increases (decreases) in temporarily restricted net assets if the terms of the gift `

impose a purpose restriction on the use of the income; and• as increases (decreases) in unrestricted net assets in all other cases.

Contributions of property, plant and equipment without donor stipulations restricting the use of such long-lived assets arereported as unrestricted revenues. Contributions of cash or other assets to be used to acquire property, plant and equip-ment are reported as increases of temporarily restricted net assets. Restrictions are considered to be satisfied at the timeof acquisition or completion of construction of such long-lived assets.

CCaasshh aanndd CCaasshh EEqquuiivvaalleennttssCash and cash equivalents are recorded at fair value, and are comprised of highly liquid financial instruments with originalmaturities of three months or less at time of purchase. Certain cash equivalents which have been restricted by donors areincluded in Investments.

IInnvveessttmmeennttssInvestment in equity and debt securities with readily determinable market values are recorded at fair value and reportedbased upon quoted market prices. Alternative investments, including hedge funds and private equity and limited partner-ships, are recorded based upon published information or partnership information (see Note 3).

DDeeppoossiittss wwiitthh BBoonndd TTrruusstteeeessDeposits with Bond Trustees represent funds held by the trustees associated with various bonds described in Note 9 below,and will be utilized to fund various construction projects.

SSpplliitt--iinntteerreesstt AAggrreeeemmeennttssThe Institute’s split-interest agreements include charitable remainder trusts, perpetual trusts held by others, and lifeincome funds. Charitable remainder trusts and life income funds for one or more beneficiaries generally pay lifetime incometo those beneficiaries, after which the principal is made available to the Institute in accordance with donor intentions.Where the Institute is the trustee, a liability is established for the present value of the estimated future payments to thebeneficiary, with the difference between the liability and the fair value of the proceeds received by the Institute recordedas a contribution. The present value calculation is performed in accordance with guidelines prescribed by the InternalRevenue Service.

Perpetual trusts held by others for the benefit of the Institute are recorded at the fair value of the assets contributed to thetrust.

DDeeffeerrrreedd RReevveennuuee aanndd DDeeppoossiittssDeferred revenue and deposits primarily represent payments received from students in advance of the start of the academ-ic year and summer semester, as well as, research grants received in advance of related work performed. Such amounts arereflected as revenue when the related services are performed.

RReesseeaarrcchh AAccttiivviittiieessThe Institute receives grant and contract income from governmental sources. The Institute recognizes revenue associatedwith direct costs of sponsored programs as the related costs are incurred. Recovery of indirect (facilities and administra-tive) costs of federally sponsored programs are at cost reimbursement rates negotiated with the Institute’s cognizantagency, the Office of Naval Research.

OOppeerraattiinngg MMeeaassuurreeThe Institute classifies its consolidated statement of activities as operating and non-operating. Operating activitiesinclude all income and expenses related to carrying out the Institute’s educational and research mission. Operating rev-enues also include investment return used to fund current operations in accordance with the endowment spending policy(see “Spending Rate Policy” below).

Non-operating activities include current year investment return in excess of amounts authorized for expenditure by theBoard of Trustees (spending rate policy); contributions, private grants and other resources intended for capital purposes orrestricted by donors for specific purposes; present value adjustments of annuities payable; gains or losses on disposal of

Stevens Institute of Technology (the “Institute”), founded in 1870 and located in Hoboken, New Jersey, educates andinspires students to acquire knowledge needed to lead in creation, application and management of technology and to excelin solving problems in any profession. The Institute is accredited by the Middle States Association of Colleges and Schoolsand the Accreditation Board of Engineering Technology and presently serves approximately 5,300 students.

The Institute is also committed to a comprehensive and rapidly growing program of research, which strengthens the educa-tional experience and materially contributes to our nation’s goals. In this context it has pioneered the concept of“Technogenesis” or the educational methodology by which faculty, students and colleagues in industry jointly nurture theprocess of conception, design, and market place realization of new technologies.

The Institute is the sole owner of Ravenswood Corporation, which owns and operates several residential properties inHoboken, New Jersey. The Institute is also the sole owner of Stevens Technology, Inc., which focuses on technology transfersin accordance with the “Technogenesis” concept, and is the majority owner of Technology Holding, LLC. The minority inter-est reflected in the accompanying consolidated statement of activities represents the interests of third party investors inthe operations of Technology Holding, LLC.

CCoonnssoolliiddaattiioonnThe accompanying consolidated financial statements include the accounts of the Institute, its wholly-owned subsidiaries,Ravenswood Corporation and Stevens Technology, Inc. and its majority owned subsidiary Technology Holding, LLC. All significantinter-company accounts have been eliminated in consolidation.

BBaassiiss ooff PPrreesseennttaattiioonnThe Institute prepares its consolidated financial statements on the accrual basis of accounting in conformity with U.S. GenerallyAccepted Accounting Principles (“GAAP”) and with standards established by the Financial Accounting Standards Board forexternal financial reporting by not-for-profit organizations. Accordingly, the Institute’s resources are classified and reportedbased upon the existence or absence of donor-imposed restrictions, as follows:

Permanently restricted: net assets subject to donor-imposed stipulation that require the corpus be permanently retained toprovide a perpetual source of income to the Institute. Donors of these assets generally permit the use of all or part of invest-ment earnings for operating or specific purposes, such as scholarships, chairs and educational and research programs.

Temporarily restricted: net assets subject to donor-imposed restrictions that will be satisfied either by actions of the Instituteor the passage of time.

Unrestricted: net assets that are not subject to donor-imposed restrictions, and therefore, are expendable for operating pur-poses. Unrestricted net assets may be designated for specific purposes by the Institute’s Board of Trustees.

Revenues are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposedrestrictions. Expenses are reported as decreases in unrestricted net assets. Appreciation or depreciation in the fair value ofinvestments and gains and losses on other assets or liabilities are reported as increases or decreases in unrestricted net assetsunless otherwise restricted by explicit donor stipulation or by law. Expirations of temporary restrictions on net assets are report-ed as net assets released from restrictions.

Contributions, including unconditional promises to give, are recognized as revenues in the period received. Unconditional prom-ises to give are recorded at their net realizable value if they are expected to be collected within one year or at the present valueof future cash flows if they are expected to be collected over periods longer than one year. Conditional promises to give are notrecognized until they become unconditional, that is when the conditions on which they depend are substantially met.Contributions of assets other than cash are recorded at their estimated fair value at date of donation. Contributions to bereceived after one year are discounted using a risk-free rate of return. Amortization of discounts is recorded as additional con-tribution revenue in accordance with donor-imposed restrictions, if any. An allowance for uncollectible contributions receivableis provided upon management’s judgment of prior collection history, type of contribution and nature of fundraising activity. Netassets resulting from certain large contributions are designated by the Institute’s Board of Trustees for capital or long-terminvestment (see Note 10).

NNoottee 22 -- SSuummmmaarryy ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinngg PPoolliicciieess

NNoottee 11 –– OOrrggaanniizzaattiioonn

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Investment expenses totaled $383,591 and $319,268 in fiscal 2005 and 2004, respectively.

Investments related to split interest agreements included within the investment categories reported above totaled approx-imately $4.9 million as of June 30, 2005 and 2004, respectively. Other investments totaling approximately $1.6 million in2004 were reclassified to other assets.

During Fiscal 2004, $5,500,000 of accumulated gains were loaned to the operating fund. The terms of the loan require repay-ment over a 10-year period, in a combination of interest-only and balloon payments with interest at an annual rate of4.75%. The first interest only annual installment of $339,788 was repaid to the endowment fund in October, 2005.

Since alternative investments may not be readily marketable, the estimated fair value is subject to uncertainty and, there-fore, may differ from the value that would have been used had a ready market for such investments existed. The valuesassigned to these holdings do not necessarily represent amounts which might ultimately be realized upon sale or other dis-position since such amounts depend on future circumstances and cannot reasonably be determined until the actual liqui-dation occurs. Because of the inherent uncertainty of such valuations, those estimated fair values may differ significant-ly from the values that would have been used had a ready market for such investments existed and the differences could bematerial.

The components of investment return for the years ended June 30, 2005 and 2004 were as follows:

2005 2004Dividends and interest $ 3,410,689 $ 2,202,381Net realized gain 5,521,099 2,779,575Net unrealized appreciation 6,020,785 12,090,867

Total investment return 14,952,573 17,072,823Investment return used for operations 5,514,544 6,338,569Net investment return $ 9,438,029 $ 10,734,254

Receivables (student, research and other) as of June 30, 2005 and 2004 were comprised of the following:

2005 2004Student $ 9,855,064 $ 7,821,703Research contracts and grants 11,529,672 13,381,343Student loans 5,441,770 5,501,863Mortgage notes 1,171,986 1,252,704Accrued interest 224,991 202,803Other 139,781 171,048

28,363,264 28,331,464Less:Allowance for doubtful student accounts 4,119,040 3,880,289Allowance for doubtful research accounts 907,739 1,050,333Allowance for doubtful student loans 542,342 542,342

5,569,121 5,472,964Total receivables, net $ 22,794,143 $ 22,858,500

NNoottee 44 –– RReecceeiivvaabblleess

property, plant and equipment; and minority interest, if any.

SSppeennddiinngg RRaattee PPoolliiccyyThe Institute maintains an investment pool for substantially all of its long-term investments. The pool is managed toachieve the maximum prudent long-term return. The Institute’s Board of Trustees has authorized a spending rate designedto fulfill the following objectives:

• Preserve the value of the investment pool in real terms (after inflation); and• Provide a predictable flow of funds to support operations.

For the years ended June 30, 2005 and 2004, the spending rate permitted the use of total returns (dividend and interest incomeand capital gains) at a rate of 5.4 % of the average year-end fair value of long term investments, over a three-year period.Investments for which the total return is permanently restricted by donors are excluded from the spending rate.

AAuuxxiilliiaarryy EEnntteerrpprriisseessAuxiliary Enterprises include revenues and expenses primarily related to student housing, the campus bookstore and studentdining facilities.

TTaaxxeessThe Institute has been classified as an organization described under Section 501(c)(3) of the Internal Revenue Code (the“Code”) and, therefore, is exempt from Federal income taxes under Section 501(a) of the Code.

PPrriioorr YYeeaarr SSuummmmaarriizzeedd FFiinnaanncciiaall IInnffoorrmmaattiioonnWhile comparative information is not required under GAAP, the Institute believes this information is useful and has includ-ed summarized financial information from its fiscal 2004 consolidated financial statements.

Such summarized information is not intended to be a complete presentation in conformity with GAAP. Accordingly, suchinformation should be read in conjunction with the Institute’s consolidated financial statements for the year ended June 30,2004, from which the summarized financial information was derived.

RReeccllaassssiiffiiccaattiioonnssCertain prior year information has been reclassified to conform with the fiscal 2005 presentation.

UUssee ooff EEssttiimmaatteessThe preparation of consolidated financial statements in conformity with generally accepted accounting principles requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenuesand expenses during the reporting period. Actual results could differ from those estimates. The most significant assumptionsinclude valuation of alternative investments without readily determinable fair values; actuarially determined costs associat-ed with split-interest agreements and the accrued post-retirement benefit obligations; and the recoverability of receivables.

The Institute’s investments consist of publicly traded fixed income and equity securities and alternative investments andcash equivalents. The fair values of publicly traded investments are generally determined based upon quoted market prices.Alternative investments, including hedge funds, private equity funds and limited partnerships, are carried at estimated fairvalues provided by the management of those funds or partnerships where the general partner considers such value to beappropriate. A portion of investments held by the limited partnerships are valued by the general partners of those partner-ships in the absence of readily determinable market values.

Cost and fair value of investments as of June 30, 2005 and 2004 were as follows:

2005 2004Fair Value Cost Fair Value Cost

Equity $ 66,724,097 $ 53,722,510 $ 62,558,627 $ 52,921,831 Alternative investments 22,295,555 17,295,696 19,145,382 15,142,053 Fixed income 17,160,168 15,670,571 16,318,603 15,513,761 Private equity 12,959,731 11,555,729 13,330,720 13,077,424 Cash and cash equivalents 4,934,079 4,934,079 2,549,465 2,549,465 Trusts 4,928,460 4,914,191 4,850,671 4,811,823 Other 1,157,502 1,340,454 1,310,461 1,560,949

Totals $ 130,159,592 $ 109,433,230 $ 120,063,929 $ 105,577,306

NNoottee 33 –– IInnvveessttmmeennttss

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The Institute provides health benefits to substantially all of its employees. Upon retirement, employees may be eligible forcontinuation of these benefits. Amounts are accrued for such benefits during the years employees provide services to theInstitute. The Institute funds its post-retirement benefit cost on a pay-as-you-go basis.

The net periodic post-retirement benefit cost for the years ended June 30, 2005 and 2004, follows:

2005 2004Service cost $ 123,293 $ 229,089 Interest cost 411,821 690,846 Amortization of loss 282,217 295,503 Amortization of prior service cost (1,102,345) (690,371)Net post-retirement benefit cost $ (285,014) $ 525,067

For the year ended June 30, 2005, a full year amortization of the plan amendment recognized November 21, 2003 was includ-ed in amortization of prior service cost; for the year ended June 30, 2004, only a partial year amortization was included. Forthe years ended June 30, 2005 and 2004, payments made by the Institute for these benefits totaled $531,974 and $703,322,respectively.

The actuarial present value of benefit obligations and the amount recognized in the consolidated statements of financialposition as of June 30, 2005 and 2004, follows:

2005 2004Change in benefit obligation

Benefit obligation at beginning of year $ 8,051,810 $ 17,475,644Service cost 123,293 229,089Interest cost 411,821 690,846Plan participants’ contributions 137,661 55,492Amendments/curtailments/special

termination - (10,540,965)Actuarial loss (1,594,610) 845,036Benefits paid (531,974) (703,332)

Benefit obligation at end of year $ 6,598,001 $ 8,051,810

Change in Plan AssetsFair value of plan assets at beginning of year $ - $ - Institute contribution 394,313 647,830Plan participant contribution 137,661 55,492Benefits paid (531,974) (703,322)

Fair value of plan assets at end of year $ - $ -

Funded status at end of fiscal year $ (6,598,001) $ (8,051,810)Unrecognized actuarial loss 3,678,339 5,555,532Unrecognized prior service cost (8,955,249) (10,057,960)

Accrued post-retirement benefit obligation $ (11,874,911) $ (12,554,238)

2005 2004Assumptions used to determine benefit obligations at June 30

Discount rate 5.25% 6.00%

2005 2004Weighted average assumptions used to determine net periodic benefit cost for the years ended June 30

Discount rate 6.00% 5.75%

NNoottee 88 -- AAccccrruueedd PPoosstt--RReettiirreemmeenntt BBeenneeffiitt OObblliiggaattiioonnss

Contributions receivable, net, as of June 30, 2005 and 2004, consisted of the following:

2005 2004Amounts due in

Less than one year $ 7,955,126 $ 10,437,297One to five years 5,742,502 11,486,768More than five years 200,000 -

13,897,628 21,924,065Less: Discount to present value 771,732 1,347,211

13,125,896 20,576,854Less: Allowance for doubtful contributions 3,001,771 2,557,155

Contributions receivable, net $ 10,124,125 $ 18,019,699

A discount for pledges to be received over periods longer than one year from date of contribution is provided using a risk freerate of return, which ranged from approximately 3% to 5% at June 30, 2005 and 2004, respectively.

From time to time, donors who are members of the Board of Trustees make pledge commitments to the Institute. At June30, 2005, contributions receivable included $7,204,366, in the aggregate, from members of the Board of Trustees.

Property, plant and equipment are stated at cost net of depreciation, or fair market value at date of contribution, if donat-ed. Upon disposal of assets, the costs and accumulated depreciation are removed from the accounts, and the resulting gainor loss, if any, is included within non-operating activities.

Depreciation is calculated by using the straight-line method over the following estimated useful lives:

Buildings 40 yearsBuilding improvements 20 yearsFurniture, fixtures and equipment 4 to 15 years

As of June 30, 2005 and 2004, property, plant and equipment consisted of the following:

2005 2004

Land $ 1,763,196 $ 1,763,196Buildings and improvements 109,961,105 106,707,631Furniture, fixtures and equipment 12,973,660 12,690,776Construction in progress 58,910,405 41,185,344

183,408,366 162,346,947Less: Accumulated depreciation 66,650,140 62,584,869Total property, plant and equipment, net $ 116,758,226 $ 99,762,078

Depreciation expense totaled $4,776,430 and $4,762,273 for the years ended June 30, 2005 and 2004, respectively.

The Institute participates in the Teachers Insurance and Annuity Association/College Retirement Equities Fund (TIAA/CREF)for academic and professional administrative personnel. In addition, the Institute participates in a defined contributionplan underwritten by the Variable Annuity Life Insurance Company (VALIC) for non-academic support and union personnel.Retirement costs related to these plans for the years ended June 30, 2005 and 2004 totaled $2,552,148 and $2,497,926,respectively.

NNoottee 77 -- PPeennssiioonn PPllaannss

NNoottee 66 -- PPrrooppeerrttyy,, PPllaanntt aanndd EEqquuiippmmeenntt

NNoottee 55 -- CCoonnttrriibbuuttiioonnss RReecceeiivvaabbllee

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Long-term debt as of June 30, 2005 and 2004, consisted of the following:

Issue (Interest rate range; Maturity Date) 2005 2004

( a) 1998 Revenue Series I Bonds (4.25%~5.38%); $ 14,755,000 $ 15,535,000Matures 7/1/2028

( b) 2000 Higher Education Capital Improvement Fund 122,500 127,500Series A Bonds (5.00%~5.75%); Matures 8/15/2020

( c) 2000 Higher Education Capital Improvement Fund 1,292,500 1,342,500Series B Bonds (2.34%~5.75%); Matures 9/1/2020

( d) 2001 Dormitory Safety Trust Fund Series A and B 1,820,346 1,985,832(Interest free); Matures 1/15/2016

( e) Equipment Leasing Fund Series 2001 A (3.50%~5.00%); 128,118 150,102Matures 8/1/2009

( f) 2002 Revenue Series C Bonds (3.00%~5.25%); 51,270,000 53,210,000Matures 7/1/2032

( g) 2003 Dormitory Safety Trust Fund Series A (Interest free); 215,000 235,000Matures 1/15/2018

( h) 2003 Equipment Leasing Fund Series A (3.50%~5.00%); 14,662 16,517Matures 8/1/2011

( i) 2004 River Street Dorm Series B (4.50%~5.375%); Matures 7/1/2034 13,265,000 -

82,883,126 72,602,451Less: Unamortized discount 572,056 675,044Long-term debt, net $ 82,311,070 $ 71,927,407

(a) Revenue Bond, 1998 Series IDuring August 1998, the Institute arranged a $17,000,000 loan with the New Jersey Educational Facilities Authority throughthe Authority’s issuance of Stevens Institute of Technology Revenue Bonds, 1998 Revenue I. The 1998 Revenue I Bonds are aspecial obligation of the Authority payable from and secured by a pledge of revenue obtained by the Authority pursuant tothe mortgage loan agreement between the Authority and the Institute. Principal and interest payments on the long termdebt are made by the Institute on a semi-annual basis to the trustee. The bonds are due serially through 2028 with interestranging from 4.25% to 5.38%.

The mortgage loan agreement is secured by (i) a mortgage on the land on which the athletic and recreation center was built;(ii) any building improvements to be made to the land; and (iii) the Technology Hall and the land upon which it was con-structed.

(b) Higher Education Capital Improvement Fund Series 2000AThe Institute entered into a loan agreement with the Authority on July 31, 2000 for capital improvements and related costs. Theloan agreement was financed through the issuance of bonds by the Authority, the Institute’s portion of which amounted to$143,138. In accordance with the loan agreement, the Institute is required to provide one-half (50%) of the annual debt serv-ice and related costs. The State of New Jersey is obligated to provide one-half (50%) of the annual debt service and relatedcosts. The bonds mature on August 15, 2020 and bear an interest rate ranging from 5.00% to 5.75%.

(c) Higher Education Capital Improvement Fund Series 2000BThe Institute entered into a loan agreement with the Authority on July 31, 2000 for capital improvements and related costs.The loan agreement was financed through the issuance of bonds by the Authority, the Institute’s portion of which amount-ed to $1,468,088. In accordance with the loan agreement, the Institute is required to provide one-half (50%) of the annu-al debt service and related costs. The State of New Jersey is obligated to provide half (50%) of the annual debt service andrelated costs. The bonds mature on September 1, 2020 and bear an interest rate ranging from 2.34% to 5.75%.

(d) Dormitory Safety Trust Fund Series 2001 A and BThe Institute entered into a loan agreement with the Authority on May 3, 2001 for improvements of dormitory safety facili-ties, including fire prevention and sprinkler systems. The loan agreement was financed through the issuance of bonds by theAuthority. The Institute’s portion amounted to $1,200,000. In accordance with the loan agreement, the Institute is required

NNoottee 99 -- LLoonngg--TTeerrmm DDeebbtt aanndd LLiinneess ooff CCrreeddiitt2005 2004Assumed medical and prescription cost trend rates at June 30

Health care cost trend rate assumed for next fiscal year – pre-65 8.25% 8.50%Health care cost trend rate assumed for next fiscal year – post-65 7.75% 8.50%Prescription drug trend rates assumed for next fiscal year 10.00% 8.50%Ultimate medical and prescription cost trend rate 5.00% 5.00%Fiscal year that ultimate trend rate is reached 2013 2010

2005 2004Effect of a 1% change in the assumed health care 1%Increase 1%Decrease 1%Increase 1%Decreasecost trend rates

Effect on total of service and interest $20,231 $(17,327) $21,014 $(17,940)cost componentsEffect on post-retirement benefit obligation $146,387 $(128,579) $165,855 $(145,782)

CCoonnttrriibbuuttiioonnssThe Institute expects to contribute $603,378 to its post-retirement health plan in fiscal year 2006.

EExxppeecctteedd bbeenneeffiitt ppaayymmeennttssEmployer Contributions Prescription Subsidy Receipts

Fiscal year ending June 30,2006 $ 657,048 $ 53,6702007 662,467 118,6412008 650,263 130,2472009 625,652 141,0662010 604,203 153,5902011 – 2015 2,907,122 914,022

The Institute applied and was approved for the Medicare Part D prescription drug federal subsidy, therefore the above dis-closure reflects, as of June 30, 2005, the future subsidy payments from Medicare, commencing January 1, 2006.

The reduction in the accumulated post-retirement benefit obligation for the subsidy related to benefits attributed to pastservice as of June 30, 2005 was $1,221,269. As the impact of the subsidy was reflected at June 30, 2005, there was no impacton the measurement of the net periodic post-retirement benefit cost for fiscal year 2005.

The Medicare Prescription Drug Improvement and Modernization Act of 2003 (the Act) was signed into law in December of2003. The Act provides certain prescription drug benefits under a new Medicare Part D program for retirees. The Act alsoprovides for a subsidy to employers who sponsor prescription drug plans that are actuarially equivalent to the new Part Dbenefit. In January of 2004, the Financial Accounting Standards Board issued a Staff Position permitting companies to deferaccounting for the effects of the Act. The Institute has elected this deferral for fiscal 2004. Management has also not yetbeen able to determine the effect of the Act or if the plan may meet actuarial equivalence for fiscal 2004, due to the recentplan changes which significantly reduced benefits. As such, the Institute’s post-retirement benefit obligation and net peri-odic post-retirement benefit cost do not reflect the effects of the Act for fiscal 2004. Guidance on the accounting for thefederal subsidy under the Act was issued in January of 2005 and the Institute may modify previously reported informationto reflect the subsidies and other changes resulting from the Act.

On November 21, 2003, the Institute announced the January 1, 2004 amendment of its post-retirement medical plan, dis-continuing coverage with Oxford medical plan and enrolling all retirees in an Aetna comprehensive plan. Under the Aetnaplan, expenses are reimbursed at 80% after a $500 single/$1,000 family deductible. Aetna coordinates with Medicarethrough exclusion. In addition, minimum employee contributions of $40 per month/single, $80 per month/family wereestablished for retirees who previously had not made any contributions. On May 17, 2004, the Institute sent a notice to theparticipants stating that all future premium increases would be passed on to the retirees. These changes to the post-retire-ment medical plan were recognized as of November 21, 2003. The change in the accumulated post-retirement benefit obli-gation due to this plan amendment is called a prior service cost, and is amortized over the average future service eligibilityof active participants not yet fully eligible. This unrecognized prior service cost was calculated to be $10,057,960 and isreflected in the accrued post-retirement benefit obligation in the consolidated statement of financial position at June 30,2004. The amortization of the prior service cost was $690,371 and was a component of the net post-retirement benefit costfor the fiscal year ended June 30, 2004.

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Principal and interest payments for long term debt for each of the next five years and thereafter are as follows:

Principal Interest TotalFiscal year ending June 30,2006 $ 2,232,990 $ 4,138,680 $ 6,371,6702007 2,316,736 4,050,662 6,367,3982008 2,422,982 3,949,972 6,372,9542009 2,126,950 3,847,989 5,974,9392010 2,228,422 3,752,298 5,980,720Thereafter 71,555,046 47,649,863 119,204,909

$ 82,883,126 $ 67,389,464 $ 150,272,590

LLiinneess ooff CCrreeddiittThe Institute has a $9,000,000 line of credit with PNC Bank (“PNC”) which bears interest at a rate per annum equal to LIBORplus one hundred (100) basis points (1.00%), which was 4.34% at June 30, 2005. On June 23, 2005 the term of this line wasextended to June 30, 2006. During the year, the balance fluctuated within the allowable amount of the line of credit. AtJune 30, 2005, the outstanding balance was $7,820,171 ($4,620,890 at June 30, 2004).

On June 20, 2003 the Institute borrowed $4,000,000 from PNC as evidenced by two Committed Non-Revolving Line of CreditNotes in favor of the bank which bear interest at a rate per annum equal to LIBOR plus one hundred twenty-five (125) basispoints (1.25%), which was 4.59% at June 30, 2005. The original expiration date was June 20, 2005, but was extended to July 31,2006 with outstanding principal and accrued interest due at that time. At June 30, 2005 and 2004, the $4,000,000 outstand-ing balance was included as a component of lines of credit in the accompanying consolidated statement of financial position.

The terms of these agreements require the lines to be collateralized by a first priority perfected lien on cash and/or mar-ketable securities in an amount not less than $13,000,000.

IInntteerreesstt EExxppeennsseeTotal interest paid on long-term debt and lines of credit for the years ended June 30, 2005 and 2004 was $4,915,679 and$4,001,698, respectively. Capitalized interest for fiscal years 2005 and 2004 was $3,408,650 and $2,894,150, respectively.Net interest expense included in the consolidated statement of activities for the fiscal years 2005 and 2004 totaled$1,507,029 and $1,107,548, respectively.

At June 30, 2005 and 2004, net assets were comprised as follows:

2005 2004Unrestricted

Operating $ (3,836,853) $ (6,394,679)Board designated:

Quasi-endowments 37,999,013 33,862,544Institutional portion of Perkins loans 2,144,872 2,030,386Net investment in plant 40,451,245 41,269,706

Total unrestricted 76,758,277 70,767,957Temporarily restricted

Education and research programs 763,551 4,605,260Capital projects 9,580,568 12,451,534Annuity and life income funds 2,311,035 2,137,473Term endowment and funds held in trust 2,560,393 420,444

Total temporarily restricted 15,215,547 19,614,711Permanently restricted

Endowment 89,181,801 84,990,392Student loans 5,160,835 4,738,022Annuity and life income funds 1,210,357 1,287,680

Total permanently restricted 95,552,993 91,016,094Total net assets $ 187,526,817 $ 181,398,762

Unrestricted contributions revenue - operating of $5,482,652 includes a donor gift in the amount of $2,133,347, the result-ing net assets of which have been designated by approval of the Board of Trustees as a quasi-endowment.

NNoottee 1100 -- NNeett AAsssseettss

to provide for the principal payments of the annual debt service in fifteen annual installments. On July 1, 2003 the Institutereceived an additional $1,000,000 from the Authority financed through the issuance of Dormitory Safety Trust Fund 2001 ABonds. In accordance with the loan agreement, the Institute is required to provide for the principal payments of the annu-al debt service in 14 annual installments. The State of New Jersey is obligated to provide the interest payments of the annu-al debt service. At June 30, 2005 and 2004, the Institute’s liability, present valued, amounted to $1,287,741 and $1,361,000,respectively. The bonds mature on January 15, 2016.

(e) Equipment Leasing Fund Series 2001 AThe Institute, along with other institutions, entered into a capital lease agreement with the Authority, dated September 1, 2001,for equipment purchases required for laboratory and instructional facilities. The agreement was financed through the issuanceof Authority bonds, the Institute’s portion of which amounted to $191,412. The bonds were issued on September 1, 2001 and bearinterest at the rate ranging from 3.5% to 5.00% per annum and mature on August 1, 2009. In accordance with the agreement,the Institute is required to make annual lease payments equal to 25% of the annual debt service and related costs. The Stateof New Jersey is obligated to pay the remaining 75% of the annual debt service and related costs. As of June 30, 2005 and 2004,the Institute had a capital lease obligation, net of unamortized interest, of $128,118 and $150,102, respectively.

(f) Revenue Bonds, 2002 Series CDuring December 2002 the Institute arranged a $59,585,000 mortgage loan with the Authority through the Authority’sissuance of Stevens Institute of Technology Revenue Bonds, 2002 Series C. The Institute on a semi-annual basis makes prin-cipal and interest payments on the long-term debt to the trustee. The bonds are due serially through 2032 with interestranging from 3.00% to 5.25%.

The mortgage loan agreement is secured by (i) a first and second mortgage of the land on which the athletic and recreationcenter was built; (ii) any building improvements to be made to the land; (iii) the Technology Hall and the land upon which ithas been constructed. The Institute pledges rentals, tuition fees and other available money sufficient to cover the cost ofoperating and maintaining the projects financed under the mortgage loan agreement.

Under the 2002 Series C Bonds, the mortgage loan agreement requires the Institute to establish and maintain all originalfunds as deposit with a trustee in a debt service reserve account and construction and other escrow accounts similar to aconstruction loan whereby the Trustee, as evidenced by Institute payments, releases funds during construction. Suchdeposits amounted to $13,775,710 and $31,831,717 as of June 30, 2005 and 2004, respectively.

(g) Dormitory Safety Trust Fund, Series 2003 AOn January 15, 2004, the Institute entered into a loan agreement with the Authority for improvements of dormitory safety facil-ities, including fire prevention and sprinkler systems. The loan agreement was financed through the issuance of bonds by theAuthority. The Institute’s portion of the funds amounted to $243,500. In accordance with the loan agreement, the Institute isrequired to provide principal payments of the annual debt service in fifteen annual installments. The State of New Jersey isobligated to provide the interest payments of the annual debt service. As of June 30, 2005 and 2004, the Institute’s liability,present valued, amounted to $175,551 and $184,788, respectively. The loan matures on January 15, 2018.

(h) Equipment Leasing Fund, Series 2003 AOn September 1, 2003, the Institute entered into a loan agreement with the Authority for equipment purchases required forlaboratory and instructional facilities. The loan agreement was financed through the issuance of bonds by the Authority.The Institute’s portion of the funds amounted to $16,517. In accordance with the loan agreement, the Institute is requiredto provide twenty-five (25%) percent of the annual debt service and related costs. The State of New Jersey is obligated toprovide seventy-five percent (75%) of the annual debt service and related costs. The interest ranges from 3.50% to 5.00%.The loan matures on August 1, 2011.

(i) River Street Dorm Revenue Bonds, Series 2004 BOn July 1, 2004, the Institute arranged a $13,265,000 mortgage loan with the New Jersey Higher Education FinancingAuthority through the Authority’s issuance of Stevens Institute of Technology Revenue Bonds, 2004 Series B. In accordancewith the loan agreement the Institute is required to provide for principal and interest payments on a semiannual basis tothe Trustee, Wachovia Bank, N.A. The bonds are due serially through 2034, with interest ranging from 4.500% to 5.375%.

Under the 2004 Series B Bonds the mortgage loan agreement requires the Institute to establish and maintain all originalfunds as deposit with a trustee in a debt service reserve account and construction and other escrow accounts similar to aconstruction loan whereby the Trustee, as evidenced by Institute payments, releases funds during construction. Suchdeposits amounted to $11,767,303 as of June 30, 2005.

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The Institute receives funding or reimbursement from Federal Government agencies for sponsored research underGovernment grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on ratesnegotiated with the Office of Naval Research (ONR), which is Stevens’ cognizant Federal agency. The Institute’s indirectcost reimbursements have been based on fixed rates with carry forward of under or over recoveries.

The Defense Contract Audit Agency (DCAA) is responsible for auditing both direct and indirect charges to grants and con-tracts in support of ONR’s negotiating responsibility. The Institute has final audited rates through Fiscal 2000. It is theopinion of management that disallowances, if any, resulting from open years will not have a material effect on the accom-panying consolidated financial statements.

The Institute has committed to invest in various partnerships for a period of years pursuant to the provisions of the individ-ual partnership agreements. As of June 30, 2005, the aggregate amount of such unfunded commitments totaled $2,657,895.

The Institute is contingently liable in the event of default for certain student loans as the guarantor of student debt due toa third party. Such loans totaled approximately $59,000 as of June 30, 2005.

As of June 30, 2005, the Institute was contingently liable as a guarantor of a related party’s (PlasmaSol Corporation) bank lineof credit in the amount of $250,000. This liability has been released as of December 31, 2005 (see Note 15, subsequent events)

The Institute is a party to various legal actions arising in the ordinary course of operations. While it is not possible to pre-dict the outcome of these actions at this time, it is the opinion of management that the resolution of these matters will nothave a material effect on the Institute’s consolidated financial position, changes in net assets, or cash flows.

Members of the Institute’s Board of Trustees and senior management may, from time to time, be associated, either direct-ly or through interlocking board memberships, with companies doing business with the Institute. Under the Institute’s con-flict of interest policy, all business and financial relationships between the Institute and entities affiliated with trusteesand officers are subject to review and approval of the Audit Committee of the Board of Trustees.

Transactions entered into during the normal course of business with certain vendors classified as related parties amount-ed to approximately $574,400 during Fiscal 2005. At June 30, 2005, amounts due to these vendors, included in accountspayable and accrued expenses on the accompanying consolidated statement of financial position totaled approximately$195,000.

From time to time, the Institute is the recipient of gift annuities from donors who are members of the Board of Trustees.These gift annuities are reported as contributions revenue with the related annuity payable reported in the accompanyingconsolidated statement of financial position.

The consolidated statement of financial position at June 30, 2005, includes a related party receivable of approximately $1.1million for mortgages due from the President. The mortgages are fully collateralized by real estate owned by the President,bear interest at 2% and are payable in monthly installments.

The Institute maintains an unfunded Supplemental Executive Retirement Plan (SERP) for the benefit of the President. Theplan provides for the payment of a pension benefit, for life and ten year certain, upon the retirement of the President. Asof June 30, 2005, the accrued cumulative benefit payable under this plan was $601,000.

NNoottee 1144 -- RReellaatteedd PPaarrttyy TTrraannssaaccttiioonnss

NNoottee 1133 -- CCoommmmiittmmeennttss aanndd CCoonnttiinnggeenntt LLiiaabbiilliittiieess

Operating expenses are reported based on the Institute’s primary program activities. The consolidated statement of activ-ities presents operating expenses before certain allocations such as depreciation, interest and operations and maintenanceof plant. Interest expense totaling $848,511 and $1,107,548 in 2005 and 2004, respectively, has been allocated to therespective functional categories based upon the purpose of the debt issuance. For the years ended June 30, 2005 and 2004,depreciation and operations and maintenance of plant were allocated as follows:

22000055 OOppeerraattiinngg EExxppeennsseess AAllllooccaattiioonn ooff TToottaall OOppeerraattiinnggbbeeffoorree CCeerrttaaiinn AAllllooccaattiioonnss AAllllooccaattiioonn ooff OOppeerraattiioonnss EExxppeennsseess pplluuss

aanndd DDeepprreecciiaattiioonn DDeepprreecciiaattiioonn aanndd MMaaiinntteennaannccee DDeepprreecciiaattiioonn PPrrooggrraammInstruction $ 39,584,084 $ 1,377,137 $ 2,161,481 $ 43,122,702Research 28,269,936 569,171 893,340 29,732,447Academic support 6,957,023 97,581 153,157 7,207,761Library 1,383,084 238,262 373,963 1,995,309Student services 11,744,599 292,485 459,069 12,496,153Public services 1,123,481 73,841 115,897 1,313,219General institutional

support 12,806,031 291,828 458,040 13,555,899Development 1,541,947 47,419 74,426 1,663,792Public relations 806,084 - - 806,084Auxiliary enterprises 10,294,100 1,788,706 2,089,940 14,172,746Total $114,510,369 $ 4,776,430 $ 6,779,313 $ 126,066,112

22000044 OOppeerraattiinngg EExxppeennsseess AAllllooccaattiioonn ooff TToottaall OOppeerraattiinnggbbeeffoorree CCeerrttaaiinn AAllllooccaattiioonnss AAllllooccaattiioonn ooff OOppeerraattiioonnss EExxppeennsseess pplluuss

aanndd DDeepprreecciiaattiioonn DDeepprreecciiaattiioonn aanndd MMaaiinntteennaannccee DDeepprreecciiaattiioonn PPrrooggrraammInstruction $ 35,298,593 $ 1,345,831 $ 2,127,482 $ 38,771,906 Research 27,922,311 556,232 879,288 2299,,335577,,883311Academic support 5,812,790 95,362 150,748 6,058,900Library 1,527,499 232,845 368,081 2,128,425Student services 10,102,091 285,836 451,848 10,839,775Public services 1,534,422 72,162 114,074 1,720,658General institutional

support 13,835,944 285,197 450,835 14,571,976Development 1,960,137 46,341 73,255 2,079,733Public relations 1,296,905 - - 1,296,905Auxiliary enterprises 8,917,031 1,842,467 2,057,067 12,816,565Total $108,207,723 $ 4,762,273 $ 6,672,678 $119,642,674

The allocation of depreciation on buildings and building improvements is based on square footage occupancy. Depreciationon equipment is allocated to the programs for which the equipment was purchased.

During the years ended June 30, 2005 and 2004, net assets were released from restrictions by incurring expenses satisfyingpurpose or time restrictions as follows:

2005 2004Instruction $ 638,589 $ 787,708Research 164,006 612,814Academic support 36,671 33,998Student services 165,269 983,585Library 2,000 67,132Public services 68,330 321,041Operations and maintenance 3,595,966 163,925Student aid 1,229,578 951,156

$ 5,900,409 $ 3,921,359

NNoottee 1122 -- NNeett AAsssseettss RReelleeaasseedd ffrroomm RReessttrriiccttiioonnss

NNoottee 1111-- AAllllooccaattiioonn ooff DDeepprreecciiaattiioonn aanndd OOppeerraattiioonnss && MMaaiinntteennaannccee EExxppeennssee,, bbyy PPrrooggrraamm

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Financial instruments include cash, receivables, investments, trusts held by others, accounts payable, lines of credit andlong-term debt.

The carrying amount of all of the Institute’s financial instruments, except with respect to the Institute’s investments in lim-ited partnerships and similar interests, and loans receivable from students under government loan programs, approximatefair value.

Loans receivable under federally guaranteed student loan programs are subject to significant restrictions. Accordingly, itis not practicable to determine such fair amounts.

On December 16, 2005, the Institute entered into a lease agreement with Celtic Leasing. This five year agreement allows theinstitute to lease office furniture having a total cost of $954,715. This agreement also provides end of term options includ-ing a purchase option for 35% of the original equipment cost, renewal of the lease for an additional two years, or refinanceof the 35% purchase option for up to five years, based upon the prevailing lease conditions. Quarterly rental paymentsunder this agreement will be $41,343.

On December 31, 2005, a separate corporation, PlasmaSol Corp., was sold to Stryker, an unrelated third party. PlasmaSolhad entered into an agreement with the Institute to license certain technologies patented by the Institute for a consider-ation of royalties and stock held by the Institute through its subsidiary Technology Holdings, LLC. As a result of this sale,the Institute received proceeds of approximately $4.5 million before administrative expenses and distributions to partnersand inventors in accordance with Institute policy. Additionally, the Institute’s contingent liability as a guarantor ofPlasmaSol’s bank line of credit totaling $250,000 was released.

NNoottee 1166 -- SSuubbsseeqquueenntt EEvveennttss

NNoottee 1155 -- FFaaiirr VVaalluuee ooff FFiinnaanncciiaall IInnssttrruummeennttss

Compiled by the Office of Development and External Affairs

Marjorie H. Everitt, Acting Vice PresidentPatrick A. Berzinski, Director, University Communications

Copies of this report are available on CD-ROM by request – 201-216-5116©2005-2006 Stevens Institute of Technology

Writers: Stephenie Overman, Alan S. BrownPhotographer: Jim Cummins

Design: Susan Pogany/graphics, etc.

Edward G. Amoroso ‘86, M.S., ‘92 Ph.D., Vice President, Network Security, AT&TLawrence T. Babbio, Jr. ‘66, B.E., M.B.A., ‘01, HonDEng, Vice Chairman &President, Verizon CommunicationsEnrique L. Blanco ‘72, B.E., ‘76, M.M.S., AAlluummnnii TTrruusstteeee, Associate Director ofTechnology, Colgate-Palmolive, Co.Stephen T. Boswell ‘89, B.A., M.A., ‘91, Ph.D., P.E., President & CEO, BoswellEngineeringThomas A. Corcoran ‘67, B.E., ‘03, HonDEng, President & CEO, Gemini Air CargoPhilip P. Crowley ‘71, B.S., J.D., Assistant General Counsel & Assistant Secretary,Johnson & Johnson Corp. Kenneth W. DeBaun ‘49, M.E., ‘95, HonDEng, President & CEO, The DeBaun World,Inc.David J. Farber ‘56, M.E., ‘61, M.S., ‘99, HonDEng, Distinguished Career Professorof Computer Science & Public Policy, Carnegie Mellon University School of ScienceAngie M. Hankins, ‘95, B.E., J.D., Attorney, Stroock and Stroock and LavanBarrett Hazeltine, B.S., M.S., Ph.D., Professor of Engineering, Brown UniversityKatherine C. Hegmann, B.S., M.S., ‘02, HonDEng., General Manager, GlobalBusiness Transformation Outsourcing, IBM CorporationHenry F. Henderson, Jr., ‘90 HonDEng., Managing Director, Thoreb North AmericaLLCEdwin J. Hess ‘55, M.E., M.B.A., Retired Senior Vice President, Exxon CorporationFrank Ianna ‘71, B.S., M.S., Former President, Network Services, AT&TJuan P. Jaime ‘05, B.E., AAlluummnnii TTrruusstteeee, Information Management LeadershipProgram, Johnson and JohnsonGeorge W. Johnston ‘72 B.E., J.D., Vice President & Chief Patent Counsel,Hoffman-LaRoche

Ronald P. LeBright ‘55, M.E., Retired Senior Vice President/Chief ExecutiveOfficer Europe, ABB Lummus Crest, Inc. John J. LoPorto ‘46, M.E., ‘54, M.S., ‘58, M.S., ‘97, HonDEng., President, LoPortoAssociates, Inc.Dawn M. Madak ‘89, B.E., AAlluummnnii TTrruusstteeee, Private InvestorHarold J. Raveché, B.A., Ph.D., D.H.L., President, Stevens Institute of TechnologyRichard R. Roscitt ‘73, B.E., M.B.A., Former President & CEO, MCIJohn A. Schepisi, Esq., ‘65, B.E., J.D., Ralph W. Selitto, Jr., ‘71, B.E., J.D., Partner, McCarter and English, LLPSteven Shulman ‘62, M.E, ‘63, M.S., ‘02, HonDEng., Principal, The Hampton GroupRichard F. Spanier ‘61, B.S., ‘62, M.S., ‘68, Ph.D., Director and ChairmanEmeritus, Rudolph Research Analytical CorporationVictoria Velasco ‘04, B.E., AAlluummnnii TTrruusstteeee, Fair Lawn, NJ High School,Mathematics TeacherJames M. Walsh ‘69, B.S., ‘71, M.S., M.B.A., Managing Principal, Walsh Advisors,LLCCardinal Warde ‘69, B.S., M.Phil., Ph.D., Professor of Electrical Engineering,Massachusetts Institute of TechnologyJerald M. Wigdortz ‘69, B.S., M.S., M.B.A., ImbotHarold P. Wilmerding, B.A., Retired Senior Vice President, United States TrustCompany of New York

EMERITUS TRUSTEE(non-voting)

Frederick L. Bissinger ‘33, M.E., ‘36, M.S., J.D., ‘73, HonDEng., Retired President,Allied Chemical Corp.

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BBOOAARRDD OOFF TTRRUUSSTTEEEESSStevens Institute of Technology is incorporated and chartered in the name of “The Trustees of the Stevens Institute of Technology.”

Officers of the CorporationLawrence T. Babbio, Jr. ChairmanKenneth W. DeBaun Vice ChairmanSteven Shulman Vice Chairman

Harold J. Raveché President Stefano Falconi (Vice President of Finance) TreasurerMark Samolewicz (Vice President of Human Resources) SecretaryDiana Colombo (Executive Assistant to the President) Assistant SecretaryMichael D’Onofrio (Controller) Assistant Treasurer

Frederick L. Bissinger Chairman Emeritus

Other Principal Officers of the InstituteHenry P. Dobbelaar, Jr. Vice President for Facilities, Support Services and Community RelationsMarjorie H. Everitt Acting Vice President for Development and External AffairsGeorge P. Korfiatis Dean of the Charles V. Schaefer, Jr. School of EngineeringErich Kunhardt Dean of the Arthur E. Imperatore School of Science and ArtsLex McCusker Acting Dean of the Wesley J. Howe School of Technology ManagementMaureen P. Weatherall Vice President for University Enrollment and Academic Services Helena S. Wisniewski Vice President for University Research and Enterprise Development

VOTING MEMBERS OF THE BOARD OF TRUSTEES