United States Mint Report to Congress on Operations From July 1 through September 30, 2009 Fourth Quarter Fiscal Year 2009

Fourth Quarter Fiscal Year (FY) 2009 Financials: FY 2009 fourth quarter total revenue decreased 17 percent from the same quarter last year, as eight percent growth in bullion revenue offset 47 percent and 27 percent declines in circulating and numismatic revenue, respectively.

Presidential $1 Coin Program: The 11th coin in the Presidential $1 Coin Program, honoring President James K. Polk, was released to the general public on August 20, 2009. Shipments of the James Polk Presidential $1 Coin to the Federal Reserve Bank totaled 82.5 million coins at the close of the fourth quarter of FY 2009.

Native American $1 Coin Program: The first coin in the annual Native American $1 Coin series, featuring Sacagawea and her infant son on the obverse and an Indian woman practicing “Three Sisters” agriculture on the reverse, was released to the public on January 2, 2009. Through the fourth quarter of FY 2009, 62.6 million Native American $1 Coins have been issued through the United States Mint’s Circulating $1 Coin Direct Ship Program. This is currently the only method available for the public to obtain these circulating coins.

2009 District of Columbia and U.S Territories Quarters Program:
United States Mint Deputy Director Andy Brunhart joined American Samoa Governor Togiola T.A. Tulafono to celebrate the launch of the American Samoa commemorative quarter-dollar coin in Pago Pago, the territory’s capital city. The American Samoa quarter, the fourth in the program, was released into circulation on July 27, 2009.

Contents

  1. Summary
  2. State of the United States Mint
  3. Status of the Public Enterprise Fund
  4. Update on Activities

State of the United States Mint

Vision and Goals of the United States Mint

The vision of the United States Mint is “to embody the American spirit through the creation of our Nation’s coins and medals. ” he United States Mint is committed to minimizing costs, streamlining operations, and ensuring that every product illustrates our American values and history. The United States Mint established the following strategic goals to uphold its vision:

  • Establish and reinforce the exclusive brand identity of the United States Mint;
  • Create and execute the most effective coin and medal portfolio strategy;
  • Increase operational efficiency while meeting the highest quality standards;
  • Develop optimal workforce and workplace culture.

Responsibilities of the United States Mint

The United States Mint’s primary responsibilities are the following:

  • Enabling commerce by minting and issuing circulating coins in amounts necessary to meet the needs of the United States.
  • Striking national medals, including Congressional Gold Medals.
  • Manufacturing, marketing and selling proof and uncirculated coins, commemorative coins and medals to the general public. The value of these products, known as numismatic items, generally depends on factors such as mintage, rarity, condition and age.
  • Manufacturing, marketing and selling gold, silver and platinum bullion coins through the American Eagle and American Buffalo Bullion Programs. The value of bullion coins generally depends on their weight in specific precious metals. These products are sold by the United States Mint to Authorized Purchasers. The coins are available to the general public through precious metal and coin dealers, brokerage companies and participating banks.
  • Safeguarding United States Mint assets and non-United States Mint assets in the bureau’s custody, including bullion reserves at the United States Bullion Depository at Fort Knox.

Current Business Environment

The current economic environment significantly affects the United States Mint’s main operating programs in different ways. This year, slowing economic activity reduced demand for circulating coins. Commercial banks and other financial institutions curtailed orders for coins and returned excess coins to the Federal Reserve Banks (FRB). The FRB continues to experience heightened returns of accumulated coins by commercial banks, resulting in high inventory levels and less need for new coin production. The market prices for copper, nickel and zinc have been trending upward in the last few months, and are expected to increase per unit cost in subsequent fiscal quarters. This operating environment will result in low seigniorage generated from circulating operations.

Declining economic conditions likely suppress consumer spending on collectibles, but also drive investors to precious metal markets as safe havens from declining equity markets. Demand for the United States Mint’s gold and silver bullion coins remains at unprecedented levels this year. The volume of precious metal planchets that the agency’s suppliers provide limited the number of bullion coins the United States Mint could produce and sell.  In response, the United States Mint diverted planchets from the numismatic program and attempted to procure additional supplies. While demand remained strong, the United States Mint was able to lift allocation and ordering limits in June 2009.

Status of the Public Enterprise Fund

The United States Mint’s Public Enterprise Fund is financed by the sale of circulating coins to the Federal Reserve and the sale of numismatic and bullion coins and other products to customers worldwide.

Image depicts 3 graphs. The first, a bar chart, shows total second quarter revenue in millions as $654 in 2007, $800 in 2008, and $663 in 2009. The second is a pie chart showing 2009 second quarter revenue by segment, with 27% Circulating, 16% Numismatic, and 57% Bullion. The third, a bar chart, shows total year to date revenue (in millions) as $2,647 in 2007, $2,808 in 2008, and $2,920 in 2009.

Fourth Quarter Ended September 30, 2009

($ in millions) 2009 2008 2007 % Change 2008 to 2009
Circulating $177 $304 $391 -42%
Numismatic $104 $142 $179 -27%
Bullion $382 $354 $84 8%
Total Revenues $663 $800 $654 -17%

*Numismatic figures w/out bullion and include surcharges.

Year to Date

($ in millions) 2009 2008 2007 % Change 2008 to 2009
Circulating $778 $1,295 $1,728 -40%
Numismatic $447 $565 $563 -21%
Bullion $1,695 $948 $356 79%
Total Revenues $2,920 $2,808 $2,647 4%

*Numismatic figures w/out bullion and include surcharges.

Circulating

Fourth quarter revenue from circulating operations totaled $177 million in FY 2009, down 42 percent from the same period in FY 2008. Circulating shipments to the FRB totaled 1.2 billion coins in the fourth quarter of FY 2009, a 58 percent decline from the 2.8 billion coins shipped in the fourth quarter of FY 2008. FY 2009 year-to-date circulating shipments totaled approximately 5.1 billion coins, down 48 percent from FY 2008 cumulative shipments of 9.9 billion coins. Circulating coin shipments continued to decline during the fourth quarter of FY 2009 because of low demand for coins and the FRB’s efforts to reduce the number of coins in its inventories.

While per-unit metal costs decreased in FY 2009, the total unit cost of all denominations except the nickel coin increased from last year. When production volumes decline because of low demand, allocated costs are spread over fewer units. In FY 2009 this offset the per-unit gains from lower base metal expenses.

Numismatic

Numismatic revenue for the fourth quarter of FY 2009 was $104 million, down 27 percent from the same quarter in FY 2008. This overall decline can be attributed to fewer products on sale compared to last year as precious metal planchets had been diverted to fulfill demand for bullion products. Economic conditions may have suppressed a portion of the public’s spending during an economic climate that remains difficult for many consumers.

Bullion

During the fourth quarter of FY 2009, the United States Mint continued to experience high demand for gold and silver bullion coins. Bullion revenues for the fourth quarter of FY 2009 totaled $382 million, up eight percent from the same quarter in FY 2008. As of the end of FY 2009, the United States Mint was able to meet public demand for gold and silver bullion coins.

Total FY 2009 revenue for gold and silver bullion coins was $1.7 billion. This is the highest revenue earned since the inception of the American Eagle Bullion Program in 1986. The bullion program provided a standard net margin of two percent.

Consolidated

The United States Mint’s revenue from fourth quarter operations totaled $663 million, down 17 percent from the same period in FY 2008.   Total FY 2009 revenue was $2.9 billion, up four percent compared to $2.8 billion last year.

Update on Activities

Presidential $1 Coin Act

James Polk Presidential $1 Coin

On August 20, 2009, the James Polk Presidential $1 Coin was released into general circulation in a ceremony at the former President’s ancestral home in Columbia, Tennessee. The James Polk Presidential $1 Coin is the 11th released in the Presidential $1 Coin Program.

Shipments of the James Polk Presidential $1 Coins to the FRB totaled 82.5 million coins at the close of the fourth quarter of FY 2009. Shipments of previously issued Presidential $1 Coins are as follows:

Presidential $1 Coin Design

Coins Shipped(millions)

1 George Washington 304
2 John Adams 200
3 Thomas Jefferson 170
4 James Madison 142
5 James Monroe 114
6 John Quincy Adams 105
7 Andrew Jackson 96
8 Martin Van Buren 99
9 William Henry Harrison 98
10 John Tyler 87

Demand and use of circulating $1 coins

Net pay, the difference between coins distributed by the FRB to commercial banks and coins returned from commercial banks, totaled $3.3 million for all $1 coins in the fourth quarter of FY 2009, a 93 percent decline from the same quarter in FY 2008. Additionally, fourth quarter net pay represented a 90 percent decline from the third quarter total of $34 million. Corresponding with the shipment data above, net pay for $1 coins has been trending downward steadily since the release of the first Presidential $1 Coin in January 2007. While declining economic activity has an effect on $1 coin demand, a downward trend is expected as the initial excitement related to the program subsides over time. More than 45 million Native American and Presidential $1 Coins were disbursed through the Circulating $1 Coin Direct Ship and Circulating $1 Coin Bulk Ship Programs during the fourth quarter.

Outreach

The fourth quarter of FY 2009 was spent refining a follow-on plan based on lessons learned and insights gained from the four-city pilot and preparing an action memorandum on the program for the Department of the Treasury.  Also, in August 2009, the United States Mint initiated a Bulk Ship Program to provide banks and larger retailers the opportunity to order $1 coins in larger quantities. In the program’s initial two months, the agency shipped 1.8 million $1 coins to customers.

The United States Mint continued efforts to ensure Federal entities comply with the requirements of the Presidential $1 Coin Act and the Native American $1 Coin Act. The agency worked with the Washington Metro Area Transit to ensure ticket machines were converted at stations throughout Washington, D.C. and surrounding areas.

Native American $1 Coins

Native American $1 Coins, authorized by Public Law 110-82, were released into circulation on January 2, 2009. The law specifies that the number of Native American $1 Coins issued in a year be at least 20 percent of the total number of $1 coins minted and issued annually. Because of this mandate and the FRB’s current refusal to order Native American $1 Coins, the United States Mint is making the coins available through its Circulating $1 Coin Direct Ship Program. As of the fourth quarter of FY 2009, 62.6 million Native American $1 Coins have been disbursed through this program. The law also directs the Secretary of the Treasury to carry out an aggressive, cost-effective, continuing campaign to encourage commercial enterprises to accept and dispense Native American $1 Coins. To meet this requirement, the United States Mint will actively promote Native American $1 Coins through its Circulating $1 Coin Bulk Ship Program and other internal programs.

Outreach

In the fourth quarter of FY 2009, the United States Mint continued to work with representatives of the Bureau of Indian Affairs and various Native American groups to encourage use of Native American $1 Coins within the American Indian business community. From September 20 to September 23, 2009, the United States Mint hosted an exhibit at the American Indian Alaska Native Tourism Association Conference in Santa Fe, New Mexico. Overall, the United States Mint received positive feedback on the new Native American $1 Coins, but there was dismay with the fact that the FRB has declined to distribute them.

2009 District of Columbia and U.S Territories Quarters Program

On September 3, 2009, the United States Mint celebrated the launch of the American Samoa commemorative quarter-dollar coin in Pago Pago, the territory’s capital city. United States Mint Deputy Director Andy Brunhart and American Samoa Governor Togiola T.A. Tulafono led the celebration of the ceremonial launch of the fourth coin in the 2009 District of Columbia and U.S. Territories Quarters Program. The American Samoa quarter was released into general circulation on July 27, 2009.

In addition, the United States Virgin Islands quarter, the fifth coin in the program, was released into circulation on September 28, 2009. A ceremonial launch event is scheduled for October 9, 2009, in Charlotte Amalie, St. Thomas, United States Virgin Islands.

2009 Lincoln Bicentennial One-Cent Program

On August 13, 2009, the United States Mint launched the third 2009 Lincoln Bicentennial One-Cent Coin on the grounds of the historic Old State Capitol in Springfield, Illinois. The new coin, placed into circulation the same day, bears a reverse (tails side) design that honors Abraham Lincoln’s professional life in Illinois. United States Senator Richard Durbin and Springfield Mayor Tim Davlin participated in the ceremony. The new coins, packaged in two-roll sets, were offered for sale the same day by the United States Mint. From August 13 to September 30, 2009, the United States Mint received 103,160 orders for the two-roll sets.

A four-coin 2009 Lincoln Bicentennial One-Cent Proof Set was also released for sale on August 26, 2009. A total of 131,119 sets were ordered as of September 30, 2009. These sets contain 95 percent copper proof versions of the four redesigned one-cent coins struck in honor of the bicentennial of Abraham Lincoln’s birth and the 100th anniversary of the first issuance of the Lincoln cent.

2009 Ultra High Relief Double Eagle Gold Coin Program

Using 21st century design technology, the United States Mint updated Augustus Saint-Gaudens’ original 1907 Double Eagle liberty design to reflect the year 2009 in Roman numerals (MMIX), four additional stars reflecting the current 50 states and the inscription IN GOD WE TRUST. The 2009 coin is made of 24-karat gold and includes a small border for a more consistent edge. A total of 28, 411 units of the 2009 Ultra High Relief Double Eagle were sold during the fourth quarter. Unaudited figures show that a total of 96,856 coins were sold in FY 2009.

The United States Mint also featured and sold the coin at the American Numismatic Association’s World’s Fair of Money in Los Angeles, California, from August 5 to August 9, 2009.

United States Mint America the Beautiful Quarters™ Program

On September 9, 2009, the United States Mint announced the 56 national sites to be honored through the United States Mint America the Beautiful Quarters Program. The quarters will be issued sequentially each year, in the order in which the featured site was first established as a national park or site. Secretary of the Treasury Timothy F. Geithner approved the list of sites recommended by the United States Mint on August 19, 2009, after consultation with the governor or chief executive of each host jurisdiction and Secretary of the Interior Ken Salazar.

This program is a multi-year initiative authorized by the America’s Beautiful National Parks Quarter Dollar Coin Act of 2008 (Act) (Public Law 110-456). The Act directs the United States Mint to mint and issue 56 circulating quarters with reverse designs emblematic of a national park or other national site in each state, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.

The designs on the reverse (tails side) of America the Beautiful Quarters coins will rotate five times each year, with the final (56th) coin in the series being released in 2021. The coins’ obverse (heads side) will feature a restored version of the familiar 1932 portrait of George Washington, showcasing the subtle details and beauty of the original model. Numismatic products available under the program will include two-roll sets; 100-coin bags; a United States Mint America the Beautiful Quarters Proof Set; and United States Mint America the Beautiful Quarters Silver Proof Set, with the five coins struck in 90 percent silver.

Additionally, under the United States Mint America the Beautiful Silver Bullion Coin Program, the United States Mint will mint and offer for sale silver bullion coins that are duplicates of the quarters. The bullion coins, to be struck in 999 fine silver, will be three inches in diameter and weigh five ounces. Inscriptions of the fineness and weight will be edge-incused.

Other Coin Events

On August 22, 2009, the United States Mint announced the designs for the 2010 American Veterans Disabled for Life Silver Dollar at the Disabled American Veterans National Convention in Denver, Colorado.  United States Mint Director Edmund C. Moy unveiled the designs.  Under the American Veterans Disabled for Life Commemorative Coin Act (Public Law 110-277), the agency will mint and issue commemorative coins in honor of veterans who became disabled for life while serving in the U.S. Armed Forces.

The coin’s designs, approved by the Secretary of the Treasury on July 30, 2009, are emblematic of the service of our disabled veterans who made enormous personal sacrifices defending the principles of our democracy.  Surcharges from coin sales are authorized to help support the construction of the American Veterans Disabled for Life Memorial in Washington, D.C., which was authorized by Congress in 2000.

Coin and Medal Design Information

2010 Lincoln Bicentennial One-Cent Coin Design Process

The Secretary of the Treasury approved the reverse design, emblematic of President Lincoln’s preservation of the union, on July 10, 2009.

2010 Native American $1 Coin Program Design

The Secretary of the Treasury approved the reverse design for the 2010 Native American $1 Coin, representing the theme Government – the Great Tree of Peace, on August 7, 2009.

2010 United States Mint America the Beautiful Quarters Program

The Secretary of the Treasury approved the list of the 56 sites to be honored in the program on August 19, 2009.  The first five sites to be honored in 2010 are Hot Springs National Park in Arkansas; Yellowstone National Park in Wyoming; Yosemite National Park in California; Grand Canyon National Park in Arizona; and Mt. Hood National Forest in Oregon.  The candidate designs were developed in consultation with the offices of the Superintendents of the National Parks and U.S. Forest Service and presented in September 2009 to the U.S. Commission of Fine Arts (CFA) and the Citizens Coinage Advisory Committee (CCAC) for comment. In accordance with the design selection process, the candidate designs were also transmitted to the governors of the respective states and the Secretary of Interior for review. The final designs are pending approval by the Secretary of the Treasury.

2010 American Veterans Disabled for Life Commemorative Coin Design

The Secretary of the Treasury approved the designs on July 30, 2009.

2010 Boy Scouts of America Centennial Commemorative Coin Design

The Secretary of the Treasury approved the designs on September 16, 2009.

2010 First Spouse Gold Coin Program

The candidate designs for the gold and medal obverse and reverse designs honoring Abigail Fillmore, Jane Pierce, President James Buchanan’s Liberty and Mary Todd Lincoln were presented to the CFA and CCAC in September 2009. The final designs are pending approval by the Secretary of the Treasury.

Director Edmund C. Moy Medal Design

The candidate designs for the medal honoring the current Director of the United States Mint were presented to the CFA and CCAC in July 2009.  Design development is currently on hold.

Constantino Brumidi Congressional Gold Medal Design

The candidate designs were developed in July and August and are scheduled to be presented to the CFA and CCAC in October 2009.

Women Airforce Service Pilots Congressional Gold Medal Design

The candidate designs were developed in July and August and are scheduled to be presented to the CFA and CCAC in October 2009.

2011 Presidential $1 Coin Design

The candidate obverse designs honoring Andrew Johnson, Ulysses S. Grant, Rutherford B. Hayes and James Garfield were in development in September. They are scheduled to be presented to the CFA and CCAC in November 2009.

Legislative Update

111th Congress Convenes

By the end of the fourth quarter, there were 22 commemorative coin bills, 24 Congressional Gold Medal bills, and two bullion coin bills introduced in the House and Senate and referred to committee during the 111th Congress.  President Barack Obama  signed into law three Congressional Gold Medal bills, the Women Airforce Service Pilots Congressional Gold Medal Act (Public Law 111-40), the New Frontier Congressional Gold Medal Act (Public Law 111-44), and the Arnold Palmer Congressional Medal Act (Public Law 111-65).

The United States Mint’s Office of Legislative & Intergovernmental Affairs worked with Congressional staff on new programs to establish appropriate liaisons, obtain necessary documents and materials, and resolve any technical issues to move the design development and manufacturing processes forward for the following:

  • Arnold Palmer Congressional Medal Act
  • New Frontier Congressional Gold Medal Act
  • Women Airforce Service Pilots Congressional Gold Medal Act
  • America’s Beautiful National Parks Quarter Dollar Act of 2008
  • United States Army Commemorative Coin Act of 2008
  • Code Talkers Recognition Act of 2008
  • Constantino Brumidi Congressional Gold Medal
  • Stephanie Tubbs Jones Gift of Life Medal Act of 2008
  • Civil Rights Act of 1964 Commemorative Coin Act

2009 Lincoln Bicentennial One-Cent Coin Exchange

The United States Mint held the third of four planned 2009 Lincoln Bicentennial One-Cent Coin exchanges on September 24, 2009, for Members of Congress, staff and the general public in the Rayburn House Office Building.  There are four new reverses for the Lincoln Bicentennial One-Cent Coin in 2009 to commemorate the bicentennial of Lincoln’s birth.  The third of these designs features Lincoln as a young professional standing in front of the Old State Capitol Building in Springfield, Illinois, with the inscriptions “United States of America,” “E Pluribus Unum,” and “One Cent.”  The fourth and final design will be issued later in the year and will represent his Presidency in Washington, D.C.

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