For the quarter ending September 30, 2002
Modern commemorative coins authorized by Congress and produced by the United States Mint date from the introduction of the George Washington 250th Anniversary Half Dollar in 1982. Congress authorized a total of 41 commemorative coin programs between 1982 and 2002, honoring American people, places, events, and institutions. Surcharges from the sales of these coins help fund a variety of organizations and projects that benefit the community at large. United States Mint commemorative coin programs have collected approximately $430 million in surcharges over the past 20 years for many worthy recipient organizations.
The Commemorative Coin Reform Act of 1996 requires the commemorative coin program to link public funding of special projects to demonstrated private support by requiring recipient organizations to show receipts of donations from private sources that are equal to or greater than the potential proceeds of coin surcharges. It also makes coin program beneficiaries partners in bearing the risks of commemorative coin programs, and it assures that the United States Mint recovers its costs of operating coin programs. Commemorative coins are a benefit, not only to numismatic enthusiasts and the recipient organizations, but also by reaffirming our history to the Nation as a whole. While the commemorative coin programs currently are increasing in their popularity following the 1996 reforms, some programs are flourishing while others stagnate. To ensure that commemorative coin programs continue to reap the benefits of the reforms, the United States Mint must continue to execute and oversee these coin programs in a conscientious, prudent and businesslike manner. This underscores the necessity of maintaining and complying with the 1996 Commemorative Coin Reform Act.
Fourth quarter sales for the U.S. Capitol Visitor Center, 2002 Winter Olympic Games and the U.S. Military Academy Bicentennial commemorative coin programs total $1.2 million. Surcharge revenue was transferred to recipient organizations during the fourth quarter, with $1.7 million split and forwarded to the Salt Lake Organizing Committee for the Olympic Winter Games of 2002 and the United States Olympic Committee (USOC) from sales of the 2002 Winter Olympic Games commemorative coins. A surcharge payment of $4,502 was received by the U.S. Capitol Preservation Commission from sales of the Capitol Visitor Center commemorative coins.
The attached financial statements provide quarterly and cumulative active program
U.S. CAPITOL VISITORS CENTER
The first commemorative coin program of 2001, Public Law 106-126, the U.S. Capitol Visitor Center (CVC) Commemorative Coin Program, was authorized to commemorate the first convening of Congress in the Capitol building. Congress established mintages of 100,000 gold coins; 500,000 silver dollar coins; and 750,000 clad half-dollar coins. Surcharges from the sale of the coins are authorized to go toward the construction, maintenance and preservation of the U.S. Capitol Visitor Center. Production for this program ended December 31, 2001, with sales ending March 7, 2002, one year following the program’s launch. As of June 30, 2002, the Capitol Preservation Commission has agreed to purchase the remaining U.S. Capitol Visitor Center coin inventory.
Analysis of Financial Position
As of September 30, 2002, the United States Mint shipped over 390,700 coins, generating total program revenues of $13.9 million, including surcharges of over $3.5 million. Estimated program profits of $1.6 million cover the potential unrecovered expenses of $136,561 in the fourth quarter financial statement. The cost of goods sold totals $4.9 million. Selling, general and administrative expenses were $3.9 million. Fourth quarter program activity resulted in a profit of $28,254 for the quarter. A surcharge payment of $4,502 was made to the Capitol Preservation commission on July 17, 2002.
2002 WINTER OLYMPIC GAMES
The 2002 Winter Olympic Commemorative Coin Act, P.L. 106-435, authorizes the production of 400,000 silver dollar coins and 80,000 gold five-dollar coins. In the spirit of the 1996 commemorative coin reform legislation to curb proliferation of commemorative coin programs, the USOC has been very responsive to past concerns, and the 2002 Games feature a single coin design for the obverse and reverse of each silver dollar and gold five-dollar coins.
Congress directed the United States Mint to divide the surcharges from the sale of the coins equally between the Salt Lake Organizing Committee for the Olympic Winter Games of 2002 and USOC. The United States Mint has received audited statements from the Salt Lake Organizing Committee and, as of this report, has received the audited statements from USOC. Previous United States Mint commemorative coin programs honoring the Olympics have raised over $130 million for our Olympic athletes and programs.
The United States Mint continued to promote and sell the 2002 Winter Olympic Games Commemorative Coin Program on its commemorative coin website. In addition, color buck slip inserts are being included in the Mint’s product fulfillment packages in order to reach collectors not on the Mint’s commemorative coin mailing list.
On May 30, 2002, representatives of the USOC and the 2002 Winter Olympics Salt Lake Organizing Committee presented an honorary Winter Olympic torch to the United States Mint in recognition of its contribution to the 2002 Winter Olympic Games. No additional marketing activities have been planned for the 2002 Winter Olympic Games Commemorative Coin program.
Analysis of Financial Position
As of September 30, 2002, the United States Mint shipped over 245,500 coins, generating total program revenues of $14.5 million. Estimated profits of $3.0 million covered the potential unrecovered expenses of $91,857. Cost of goods sold totaled $5.0 million, and selling, general and administrative expenses are $3.0 million. Fourth quarter program activity resulted in a profit of $320,201. Two recipient organizations will share the surcharges for the Winter Olympics program – the Salt Lake Organizing Committee and the USOC. Both the Salt Lake Organizing Committee and the USOC have satisfied the private-source fundraising requirement; they are now qualified to receive surcharge payments from the United States Mint. Surcharges collected for sales through the fourth quarter total over $3.5 million. Surcharges paid total $1.7 million.
U.S. MILITARY ACADEMY BICENTENNIAL
The U.S. Military Academy Bicentennial Commemorative Coin Act, P.L. 103-328, authorizes the production of 500,000 silver dollar coins. Surcharges from the sale of the coins will go to the Association of Graduates, U.S. Military Academy (USMA), to assist efforts to provide direct support to the academic, military, physical, moral, and ethical development programs of the Corps of Cadets, USMA, West Point, New York. As authorized by the enabling legislation, this will be the last modern commemorative comprising silver from the Nation’s Strategic and Critical Materials Stockpile, as the inventory in that stockpile has reached a level that will preclude its use in future Mint commemorative coin programs. The Secretary of the Treasury approved final designs for the USMA Bicentennial Commemorative Coin program on May 30, 2001. The U.S. Bullion Depository at West Point is the minting facility where production began in the last weeks of the first quarter of 2002, and issuance of the coin began on March 16, 2002. Consistent with the enabling legislation, the coins are being struck at the Bullion Depository at the West Point Mint because it is located on the USMA’s grounds.
The United States Mint continued to promote and sell the 2002 USMA Silver Dollars on its commemorative coin website. In addition, color buck slip inserts were included in the United States Mint’s product fulfillment packages. West Point Mint staff visited USMA in July to help sell the 2002 USMA Silver Dollars at the Military Academy’s annual new cadet orientation day. United States Mint marketing staff provided several thousand color buck slips to the USMA’s Athletic Association and Association of Graduates. These buck slips were mailed to USMA alumni who are expected to attend this fall’s Army football games. West Point staff will aid the USMA in coin sales at these games.
Analysis of Financial Position
As of September 30, 2002, the United States Mint shipped nearly 364,000 coins, generating total program revenues of $11.8 million, including surcharges of nearly $3.6 million. Estimated program profits of $1.6 million cover the potential unrecovered expenses of $217,386 in the fourth quarter financial statement. Cost of goods sold total $3.0 million. Selling, general and administrative expenses were $3.6 million. Third quarter revenues posted a profit of $344,045 for the quarter. The Association of Graduates, USMA, submitted its private-source fundraising statement and auditor’s attestation on April 25, 2002. The documentation is satisfactory, and the organization is now qualified to receive surcharge payments from the United States Mint.
FUTURE COMMEMORATIVE COIN PROGRAMS
2003 First Flight Centennial Commemorative Coins Program (Gold, Silver, Clad)
This gold, silver and clad coin series will commemorate the 100th anniversary of the Wright brothers’ first flight on December 17, 1903, in Kitty Hawk, North Carolina. United States Mint engravers were provided with source materials and began the initial design process in December 2001. The current legislation states that the United States Mint may issue coins beginning August 2003.
Program surcharges will go to the First Flight Foundation for the purposes of repairing, refurbishing, and maintaining the Wright Brothers Monument on the Outer Banks of North Carolina and expanding or, if necessary, replacing and maintaining the visitor center and other facilities at the Wright Brothers National Memorial Park.
The United States Mint’s engraving staff prepared candidate designs for the First Flight Commemorative Coin Program. The designs were presented to the Citizens Commemorative Coin Advisory Committee on August 2, 2002. The Commission of Fine Arts reviewed the design candidates on September 19, 2002.
There is currently no second commemorative coin program authorized for issuance in 2003.
2004 Thomas Alva Edison Commemorative Coins Program (Silver)
This commemorative silver dollar will commemorate the 125th anniversary of the invention of the light bulb by Thomas A. Edison. Design concepts for this coin will be provided at a later date.
Program surcharges will be shared as follows:
(1) MUSEUM OF ARTS AND HISTORY- Up to 1/8 to the Museum of Arts and History, in the city of Port Huron, Michigan, for the endowment and construction of a special museum on the life of Thomas A. Edison in Port Huron.
(2) EDISON BIRTHPLACE ASSOCIATION- Up to 1/8 to the Edison Birthplace Association, Incorporated, in Milan, Ohio, to assist in the efforts of the association to raise an endowment as a permanent source of support for the repair and maintenance of the Thomas A. Edison birthplace, a national historic landmark.
(3) NATIONAL PARK SERVICE- Up to 1/8 to the National Park Service, for use in protecting, restoring, and cataloguing historic documents and objects at the `invention factory’ of Thomas A. Edison in West Orange, New Jersey.
(4) EDISON PLAZA MUSEUM- Up to 1/8 to the Edison Plaza Museum in Beaumont, Texas, for expanding educational programs on Thomas A. Edison and for the repair and maintenance of the museum.
(5) EDISON WINTER HOME AND MUSEUM- Up to 1/8 to the Edison Winter Home and Museum in Fort Myers, Florida, for historic preservation, restoration, and maintenance of the historic home and chemical laboratory of Thomas A. Edison.
(6) EDISON INSTITUTE- Up to 1/8 to the Edison Institute, otherwise known as `Greenfield Village,’ in Dearborn, Michigan, for use in maintaining and expanding displays and educational programs associated with Thomas A. Edison.
(7) EDISON MEMORIAL TOWER- Up to 1/8 to the Edison Memorial Tower in Edison, New Jersey, for the preservation, restoration, and expansion of the tower and museum.
(8) HALL OF ELECTRICAL HISTORY- Up to 1/8 to the Schenectady Museum Association in Schenectady, New York, for the historic preservation of materials of Thomas A. Edison and for the development of educational programs associated with Thomas A. Edison.
Source materials were received from the recipient organization and cleared by the United States Mint’s Chief Counsel’s Office. The materials were subsequently forwarded to the United States Mint’s engraving staff where preliminary design candidates are being prepared.
2004 Lewis and Clark Commemorative Coins Program (Silver)
The commemorative silver dollar will commemorate the bicentennial of the historic expedition conducted by the Corps of Discovery. The expedition departed St. Louis, Missouri on May 14, 1804. United States Mint engravers were provided with source materials and began the initial design process in December 2001.
Program surcharges will go to the Lewis and Clark Bicentennial Council (2/3), and the National Park Service (1/3), for activities associated with commemorating the bicentennial of the Lewis and Clark Expedition.
The United States Mint’s engraving staff prepared candidate designs. The Citizens Commemorative Coin Advisory Committee reviewed the designs on Thursday, August 29, 2002. The designs are scheduled to be presented to the Commission of Fine Arts in October 2002.
Both of the commemorative coin programs authorized for 2001, the Capitol Visitor Center Commemorative Coin program and the American Buffalo Coin Commemorative Coin program, have closed. The National Museum of the American Indian has submitted the appropriate audited statements attesting to its compliance with the CCRA requirements and has received final surcharge payments from sales of the commemorative coins. As of September 30, 2002, the Capitol Visitor Center has submitted the appropriate audited statements attesting to its compliance with the CCRA requirements, and the U.S. Capitol Preservation Commission received a surcharge payment of $4,502 from the sale of the Capitol Visitor Center Commemorative Coins.
The Salt Lake Organizing Committee met the private-source fundraising requirement on January 30, 2002. The USOC met this requirement on June 14, 2002, and both qualified to receive surcharge payment from the United States Mint. As of September 30, 2002, surcharge revenue was transferred to both recipient organizations during the fourth quarter, with $1.7 million split and forwarded to the Salt Lake Organizing Committee and the USOC from sales of the 2002 Winter Olympic Games commemorative coins.
COMMEMORATIVE COIN PROGRAMS
FINANCIAL SUMMARY FROM INCEPTION THROUGH SEPTEMBER 30, 2002
|CAPITOL VISITOR CENTER||2002 WINTER OLYMPICS||UNITED STATES MILITARY ACADEMY||Description|
|COST OF GOODS SOLD|
|Proceeds on Silver||$518,081||$458,701||$811,390||Market Value of Mint obtained silver less statutory value of silver|
|Proceeds on Gold||$1,937,796||$2,641,153||$0||Payments to Treasury’s General Fund for profit on gold|
|Manufacturing and Assembling||$2,461,225||$1,948,327||$2,153,523||Manufacturing and Assembling (includes statutory value of precious metals)|
|Total Cost of Goods Sold||$4,917,102||$5,048,181||$2,964,913|
|RESULTS BEFORE SELLING, GENERAL & ADMINISTRATIVE||$9,073,732||$9,500,942||$8,886,370|
|SELLING, GENERAL & ADMINISTRATIVE|
|Promotional||$1,125,771||$765,205||$909,380||Promotional includes advertising, printing & postage|
|General & Administrative & Marketing||$1,898,751||$1,540,277||$1,340,614||Fixed overhead allocated to program|
|Total Selling, General & Administrative||$3,870,249||$2,989,459||$3,632,901|
|PROFIT BEFORE SURCHARGES||$5,203,483||$6,511,483||$5,253,469|
|SURCHARGE ON REVENUE||$3,527,542||$3,518,165||$3,638,520||Proceeds collected for Benefiting Organizations|
|ESTIMATED PROGRAM PROFIT (LOSS)||$1,675,941||$2,993,318||$1,614,949||(Note 2)|
|POTENTIAL UNRECOVERED MINT INVESTMENT (Note 1)|
|Melting||$583||$1,049||$1,527||Cost to melt ending inventory and condemned coins|
|Manufacturing and Assembling||$76,187||$79,252||$158,270||Manufacturing and assembling (without statutory value of precious metals)|
|Packaging Material||$45,634||$9,832||$16,477||Packaging material that has not been used in mfg. & assmblg.|
|Die Manufacturing||$14,157||$1,724||$41,112||Cost of unused dies|
|Total Potential Unrecovered Mint Investment||$136,561||$91,857||$217,386|
|SURCHARGES FORWARDED TO BENEFITING ORGANIZATIONS||$3,425,137||$1,718,145||$0|
The Interim Profit and Loss analysis was prepared using the modified acrrual basis of accounting.
Note 1 – The Mint’s unrecovered investment has been displayed in accordance with the requirements of Sec. 529 of P.L. 104-208, and represents the costs of associated with the Mint’s inventory of coins, packaging material, and dies on hand. If no additional sales were made, these amounts would be charged as expenses of the associated programs.
Note 2 – PL 104-208 requires the Mint to recover all offordable operation and program costs prior to the release of surcharge funds. The Mint will reduce the surcharge payment to recover these costs, as necessary.