For the quarter ending June 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, the program remains stable. 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.
Third quarter sales for the U.S. Capitol Visitor Center, 2002 Winter Olympic Games and the U.S. Military Academy Bicentennial commemorative coin programs total $8.3 million. Surcharge revenue was transferred to recipient organizations during the third quarter, with nearly $1.2 million forwarded to the U.S. Capitol Preservation Commission from sales of the Capitol Visitor Center commemorative coins and a final payment of $1,270 received by the Smithsonian Institution’s National Museum of the American Indian for sales of the American Buffalo commemorative coin.
The attached financial statements provide quarterly and cumulative active program data.
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 U.S. Olympic Committee (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 United States Olympic Committee 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.
Analysis of Financial Position
As of June 30, 2002, the United States Mint shipped over 239,000 coins, generating total program revenues of $14.2 million. Estimated profits of $2.7 million covered the potential unrecovered expenses of $127,623. Cost of goods sold totaled $4.9 million for the third quarter. Selling, general and administrative expenses are $3.1 million. Third quarter program activity resulted in a profit of $260,279. Two recipient organizations will share the surcharges for the Winter Olympics program – the Salt Lake Organizing Committee (SLOC) and the United States Olympic Committee (USOC). Both the SLOC 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 third quarter total over $3.4 million.
UNITED STATES 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, to assist efforts to provide direct support to the academic, military, physical, moral, and ethical development programs of the Corps of Cadets, U.S. Military Academy (USMA), West Point, New York. As authorized by the enabling legislation, this will be the last modern commemorative comprising silver from the Nation’s Defense Logistics Agency 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 campus.
The pre-issue period for the USMA Bicentennial Commemorative Coin Program ended on April 29, 2002. The Mint continues to promote the USMA Bicentennial Commemorative Coin Program on its commemorative coin website and via color buck slips being mailed to Mint customers in product fulfillment packages. In addition, black and white and color direct response print advertisements were placed in Coin World and Numismatic News, CoinAge and Coins Magazines. The Mint also placed black and white direct response print advertisements for the USMA Bicentennial Commemorative Coin Program in two affinity publications: the May/June issue of Assembly Magazine — a publication widely read and distributed to the Association of Graduates — and Pointer View, a tabloid newspaper read by USMA cadets.
Analysis of Financial Position
As of June 30, 2002, the United States Mint shipped over 347,000 coins, generating total program revenues of $11.3 million, including surcharges of nearly $3.5 million. Estimated program profits of $1.3 million cover the potential unrecovered expenses of $228,673 in the third quarter financial statement. The cost of goods sold totals $2.8 million. Selling, general and administrative expenses were $3.7 million. Third quarter program activity resulted in a profit of $1.6 million for the quarter. The Association of Graduates, USMA, submitted its matching funds 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.
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 June 30, 2002, the United States Mint shipped over 367,000 coins, generating total program revenues of $13.7 million, including surcharges of over $3.4 million. Estimated program profits of $1.6 million cover the potential unrecovered expenses of $200,576 in the third quarter financial statement. The cost of goods sold totals $4.8 million. Selling, general and administrative expenses were $3.8 million. Third quarter program activity resulted in a loss of $3,825 for the quarter. The second interim surcharge payment of $1,183,761 was made to the Capital Preservation Commission on April 29, 2002.
FURTURE 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 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 first round candidate designs for the commemorative coins are currently being circulated for an internal roundtable review. Once commemorative coin designs are determined, the recipient organization, the Citizens Commemorative Coin Advisory Committee, and the Commission of Fine Arts will review the designs.
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.
Members of the United States Mint’s Sales and Marketing and Chief Counsel staff participated in an initial meeting with representatives from six of the eight designated recipient organizations on April 2, 2002. The United States Mint is currently coordinating with the recipient organizations to develop source material for design concepts.
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 met with representatives of the Lewis and Clark Bicentennial Council in May 2001 to discuss program objectives. The first round candidate designs for the commemorative coin are currently being circulated for an internal roundtable review. Once these designs are determined coinable, they will be reviewed by the recipient organization, the Citizens Commemorative Coin Advisory Committee, and the Commission of Fine Arts.
Both of the commemorative coin programs authorized for 2001, the Capitol Visitor Center Commemorative Coin program and the American Buffalo 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 June 30, 2002, the Capitol Visitor Center has submitted the appropriate audited statements attesting to its compliance with the CCRA requirements and is qualified to receive future final surcharge payments.
The Salt Lake Organizing Committee met the matching funds requirement on January 30, 2002. The USOC met this requirement on June 14, 2002 and is qualified to receive surcharge payment from the United States Mint. On April 25, 2002, the United States Mint received the matching funds statement with auditor’s attestation from the United States Military Academy Association of Graduates. The documentation is satisfactory, and the organization is qualified to receive surcharge payment from the United States Mint.
COMMEMORATIVE COIN PROGRAMS
FINANCIAL SUMMARY FROM INCEPTION THROUGH MARCH 31, 2002
|CAPITOL VISITOR CENTER||BUFFALO||2002 WINTER OLYMPICS||UNITED STATES MILITARY ACADEMY||Description|
|COST OF GOODS SOLD|
|Proceeds on Silver||$511,610||$1,406,207||$423,455||$259,643||Market Value of Mint obtained silver less statutory value of silver|
|Proceeds on Gold||$1,900,463||$0||$2,466,810||$0||Payments to Treasury’s General Fund for profit on gold|
|Manufacturing and Assembling||$2,406,343||$4,667,321||$1,806,174||$683,869||Manufacturing and Assembling (includes statutory value of precious metals)|
|Total Cost of Goods Sold||$4,818,416||$6,073,528||$4,696,439||$943,512|
|RESULTS BEFORE SELLING, GENERAL & ADMINISTRATIVE||$8,843,370||$10,591,360||$8,742,358||$2,793,761|
|SELLING, GENERAL & ADMINISTRATIVE|
|Promotional||$1,126,812||$557,955||$999,714||$1,047,129||Promotional includes advertising, printing & postage|
|General & Administrative & Marketing||$1,852,490||$1,484,038||$1,433,000||$427,024||Fixed overhead allocated to program|
|Total Selling, General & Administrative||$3,809,857||$2,792,998||$3,065,550||$1,913,783|
|PROFIT BEFORE SURCHARGES||$5,033,513||$7,798,362||$5,676,808||$879,978|
|SURCHARGE ON REVENUE||$3,420,635||$5,000,000||$3,263,970||$1,164,320||Proceeds collected for Benefiting Organizations|
|ESTIMATED PROGRAM PROFIT (LOSS)||$1,612,878||$2,798,362||$2,412,838||($284,342)||(Note 2)|
|POTENTIAL UNRECOVERED MINT INVESTMENT (Note 1)|
|Melting||$1,321||$2,830||$2,051||$7,088||Cost to melt ending inventory and condemned coins|
|Manufacturing and Assembling||$101,396||$35,030||$177,030||$546,919||Manufacturing and assembling (without statutory value of precious metals)|
|Packaging Material||$54,369||$2,026||$4,939||$23,114||Packaging material that has not been used in mfg. & assmblg.|
|Die Manufacturing||$17,542||$17,192||$11,578||$16,141||Cost of unused dies|
|Total Potential Unrecovered Mint Investment||$174,628||$57,078||$195,598||$593,262|
|SURCHARGES FORWARDED TO BENEFITING ORGANIZATIONS||$2,236,874||$4,998,730||$0||$0|
This report summarizes the unaudited financial activities of the U.S. Mint’s Commemorative Programs and is intended for the sole use of the Banking and Appropriation Subcommittees and should not be used for any other purposes.
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.