United States Mint Report to Congress on Operations From April 1 through June 30, 2009 Third Quarter Fiscal Year 2009

Third Quarter Fiscal Year (FY) 2009 Financials: FY 2009 third quarter total revenue increased 13 percent from the same quarter last year, as 121 percent growth in bullion revenue offset 19 percent and 39 percent declines in circulating and numismatic revenue, respectively.

Presidential $1 Coin Act: The tenth coin in the Presidential $1 Coin Program honors President John Tyler and was released to the general public on May 21, 2009.  Shipments of the John Tyler Presidential $1 Coin to the Federal Reserve Bank totaled $85.4 million coins at the close of the third quarter of FY 2009.

2009 District of Columbia and U.S. Territories Quarters Program: United States Mint Director Edmund C. Moy joined Governor Luis Fortuno for a ceremonial launch of the Puerto Rico commemorative quarter-dollar coin in San Juan on April 2, 2009.  The event took place at Old San Juan’s La Arcada in Paseo La Princesa.

On June 3, 2009, Director Moy joined Governor Felix Camacho and first lady Joann Camacho at a ceremony at Skinner Plaza in Hagatna, Guam, to celebrate the release of the Guam commemorative quarter-dollar.  The Guam quarter, the third in the program series, was released into circulation on May 26, 2009.

Native American $1 Coin Act: 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 third quarter of FY 2009, 23.8 million Native American $1 Coins have been disbursed through the United States Mint’s Circulating $1 Coin Direct Ship program.

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

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 retailers’ and the public’s demand for circulating coins for use in cash transactions.  Commercial banks and other financial institutions curtailed orders for coins and returned excess coins to the Federal Reserve Banks (FRB).  The FRB decreased orders for newly minted coins in response to these conditions. The FRB also recently began targeting much lower inventory levels, further reducing their need for newly minted coinage.  While prices for copper, nickel and zinc remain below highs experienced in prior fiscal years, they have exhibited upward trends in recent months.

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 the agency’s suppliers provide could limit the number of bullion coins the United States Mint could produce and sell in the first two quarters of FY 2009.  In response, the United States Mint diverted planchets from the numismatic program and attempted to procure additional supplies.  Demand for bullion products has showed some signs of easing in recent months.  However, the United States Mint expects demand for bullion coins to remain strong for a sustained period until economic conditions improve and investors are drawn toward alternative investments.

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 $76 in 2007, $677 in 2008, and $688 in 2009. The second is a pie chart showing 2009 second quarter revenue by segment, with 22% Circulating, 14% Numismatic, and 64% Bullion. The third, a bar chart, shows total year to date revenue (in millions) as $1,993 in 2007, $2,007 in 2008, and $2,257 in 2009.

Third Quarter Ended June 30, 2009

($ in millions) 2009 2008 2007 % Change 2008 to 2009
Circulating $148 $388 $552 -62%
Numismatic $99 $91 $104 9%
Bullion $441 $198 $50 123%
Total Revenues $688 $677 $706 2%

*Numismatic figures w/out bullion and include surcharges.

Year to Date

($ in millions) 2009 2008 2007 % Change 2008 to 2009
Circulating $601 $990 $1,337 -39%
Numismatic $343 $424 $383 -19%
Bullion $1,313 $593 $273 121%
Total Revenues $2,257 $2,007 $1,993 12%

*Numismatic figures w/out bullion and include surcharges.

Circulating

Third quarter revenue from circulating operations totaled $148 million in FY 2009, down 62 percent from the same period in FY 2008. Circulating shipments to the Federal Reserve Banks totaled 0.94 billion coins in the third quarter of FY 2009, a 71 percent decline from the 3.2 billion coins shipped in the third quarter of FY 2008.  Based on the most recent projections from the Federal Reserve, circulating shipments for the fourth quarter FY 2009 are expected to be 1.2 billion coins compared to 2.8 billion coins shipped during the fourth quarter of FY 2008, a 57 percent decrease.  The decrease in orders for circulating coinage this year reflects low economic demand for coins and Federal Reserve Banks’ efforts to reduce the amount of coins in their inventories.

Comparatively lower metal prices for copper, nickel, and zinc has reduced the current per-unit metal costs for all denominations compared to prior years.  This reduction is being offset by the current low production volumes which are causing fixed and allocated costs to be spread over fewer units.  The daily metals prices have been trending upward in the past few months, which is expected to increase per-unit costs in subsequent fiscal quarters.  This operating environment will result in low revenues and low seigniorage generated from circulating operations in FY 2009 compared to prior years.

Numismatic

Numismatic revenue for the third quarter of FY 2009 totaled $99 million, up nine percent from the same quarter in FY 2008.  This increase can be attributed to the release of the 2009 United States Mint Proof Set® in June 2009, and strong demand for the 2009 Lincoln Bicentennial One-Cent Two-Roll Set.  Cumulative numismatic revenue year to date through the third quarter of FY 2009 totaled $343 million, down 22% from the same period of FY 2008.  This overall decline can be attributed to fewer products on sale compared to last year as precious metal planchets have been diverted to fulfill demand for bullion products. As of the end of the third quarter, the United States Mint has not yet released 2009 American Eagle Gold and Silver Proof Coins, 2009 Uncirculated Coin Sets, and 2009 Silver Proof Sets – some of our core annual numismatic products.  A large portion of revenue from sales of these products will be pushed to next fiscal year.

Bullion

During the third quarter of FY 2009, the United States Mint continued to experience unprecedented demand for gold and silver bullion coins.  Bullion revenues for the third quarter of FY 2009 totaled $441 million, up 123 percent from the same quarter in FY 2008.  The United States Mint lifted allocations for American Eagle Gold and Silver One-Ounce Bullion Coins to Authorized Purchasers on June 15, 2009, and currently the United States Mint is able to meet demand for these bullion coins.  Total FY 2009 revenue is $1.31 billion. This is the highest revenue since the inception of the American Eagle Bullion Program in 1986.  With three months remaining in the fiscal year, bullion revenues have already surpassed the total FY 2008 bullion revenue of $949 million by 38 percent.

Consolidated

The United States Mint’s revenue from third quarter operations totaled $688 million, up two percent from the same period in FY 2008.   Year-to-date revenue continues to exceed last year’s levels as increases in bullion sales offset decreases in both the circulating and numismatic activity.

Update on Activities

Presidential $1 Coin Act

John Tyler Presidential $1 Coin 

The United States Mint held a launch ceremony for the John Tyler Presidential $1 Coin on May 19, 2009, at Sherwood Forest Plantation in Charles City, Virginia, the home of President Tyler.  Tyler’s grandson, Harrison Tyler, joined United States Mint Deputy Director Andrew Brunhart to celebrate the coin’s release into general circulation on May 21, 2009.  The John Tyler Presidential $1 Coin is the 10th released in the series.

Shipments of the John Tyler Presidential $1 Coins to the Federal Reserve Banks totaled 84.5 million coins at the close of the third 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 97

Demand and use of circulating $1 coins

Net pay, the difference between coins distributed by the Federal Reserve Banks to commercial banks and coins returned from commercial banks, totaled $34 million for all $1 coins in the third quarter of FY 2009, a 46 percent decline from the same quarter in FY 2008.  Additionally, third quarter net pay represented a 24 percent increase from the second quarter total of $27 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 7.7 million Presidential $1 Coins were disbursed through the Circulating $1 Coin Direct Ship Program during the third quarter.

Outreach

The third quarter of FY 2009 was spent developing and refining a follow-on $1 Coin Robust Circulation Program based on lessons learned and insights gained from the four-city pilot.

Native American $1 Coins

Native American $1 Coins, authorized by Public Law 110-82, were released into circulation on January 2, 2009. The law stipulates 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 Federal Reserve Banks’ current reluctance 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 third quarter of FY 2009, 23.8 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 expanded $1 Coin Robust Circulation Program and other internal programs.

Outreach

In the third quarter of FY09, the United States Mint worked with representatives of the Bureau of Indian Affairs and various Native American groups to encourage use of Native American $1 Coins within the Native American business community.

2009 District of Columbia and U.S Territories Quarters Program

On April 2, 2009, United States Mint Director and Governor Luis Fortuno placed a mockup of the Puerto Rico commemorative quarter-dollar coin on a giant map, signaling the ceremonial launch of the United States Mint’s latest coin release.  Puerto Rico’s striking quarter design evokes its tropical beauty, rich history and culture.   Joining the celebration were Puerto Rico’s first lady, Luce Vela, and Secretary of State Kenneth McClintock, who handed out the shiny new coins.  Puerto Rico officially became a United States commonwealth on July 25, 1952.  The Commonwealth of Puerto Rico commemorative quarter, released into circulation on March 30, is the second of six new coins in the 2009 District of Columbia and U.S. Territories Quarters Program.
The United States Mint also introduced the Guam commemorative quarter-dollar in a ceremony at Skinner Plaza in Hagatna, Guam, with Director Moy and Guam Governor Felix Camacho and the first lady, Joann Camacho. The Guam commemorative quarter-dollar, released into circulation on May 26, 2009, is the third in the 2009 District of Columbia and U.S. Territories Quarters Program.

2009 Lincoln Bicentennial One-Cent Program

The United States Mint held a ceremonial launch on May 14, 2009, at the Lincoln Amphitheatre in Lincoln State Park in Lincoln City, Indiana, to mark the release of the second redesigned one-cent coin struck in honor of the bicentennial of Abraham Lincoln’s birth.  The coin, released into circulation the same day, features a reverse design emblematic of Lincoln’s formative years in Indiana.

Circulating versions of the coins were released for sale in specially wrapped two-roll sets.  From May 14 through June 30, 2009, the United States Mint took orders for 265,294 two-roll sets.

The United States Mint will mint and issue two additional one-cent coins in 2009 with reverse designs emblematic of Lincoln’s professional life in Illinois and his presidency in Washington, D.C.  It will also mint and issue numismatic one-cent coins with the exact metallic content contained in the 1909 Lincoln Cent – 95 percent copper, three percent zinc and two percent tin.  These will feature proof and uncirculated finishes, and will be offered for sale in numismatic annual sets, a special Lincoln Coin and Chronicles Set and a four-coin 2009 Lincoln Bicentennial One-Cent Proof Set.

2009 Ultra High Relief Double Eagle Gold Coin Program

Using 21st century design technology, Augustus Saint-Gaudens’ original 1907 Double Eagle liberty design was updated 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 11,259 units of the 2009 Ultra High Relief Double Eagle Gold Coin were sold during the third quarter.  Unaudited figures show that a total of 68,319 coins were sold from January 22 to June 30, 2009.

In an effort to increase sales and expand its customer base, the United States Mint created an advertising campaign specifically for this product.  Print advertisements and online banners featuring the coin were created to promote the coin and direct customers to an online “Landing Experience” (www.uhrgoldcoin.gov), which features information about the history of this coin and a 360-degree look.  Print and online advertisements started on May 26, 2009, and are expected to run through December.

Coin and Medal Design Information

2010 Lincoln Bicentennial One-Cent Coin Design Process

The candidate reverse designs for the 2010 and beyond Lincoln Cent, emblematic of President Lincoln’s preservation of the Union, were presented to the Federal advisory committees, the U.S. Commission of Fine Arts (CFA) and Citizens Coinage Advisory Committee (CCAC), in April.  The final reverse design is pending approval by the Secretary of the Treasury.

2010 Native American $1 Coin Program Design Process

The candidate reverse designs for the 2010 Native American $1 Coin, representing the theme “Government – the Great Tree of Peace,” were presented to the CFA and CCAC in April.  Comments of both committees were then shared with the consulting groups — the National Congress of American Indians, the Senate Committee on Indian Affairs and the Congressional Native American Caucus of the House of Representatives.

2010 America’s Beautiful National Parks Quarter Dollar Coin Act of 2008 Quarters Design Process

In consultation with National Park Service, U.S. Fish and Wildlife Service, U.S. Forest Service and the chief executives of each host jurisdiction, the recommended sites for the 50 states, District of Columbia and five U.S. territories are being reviewed for eligibility and appropriateness.  The list of the 56 sites will be transmitted to the Secretary of the Interior in early July to validate the appropriateness of the sites and the dates they were first established.

2010 American Veterans Disabled for Life Commemorative Coin Design Process

The candidate designs for this commemorative coin were presented to the CFA and CCAC in May.  The final obverse and reverse designs are pending approval by the Secretary of the Treasury.

2010 Boy Scouts of America Centennial Commemorative Coin Design Process

Design development for this commemorative coin concluded in May, and the candidate designs were presented to the CFA and CCAC in June.

2010 First Spouse Gold Coin Program

The designs for the First Spouse Gold Coin and Medal obverse and reverse designs honoring Abigail Fillmore, Jane Pierce, President James Buchanan’s Liberty and Mary Todd Lincoln were developed during the fiscal 2009 third quarter.  In June, the candidate designs were transmitted to consulting historians for review and comment.

Daw Aung San Suu Kyi Congressional Gold Medal Design Process

The designs for the medal honoring Burmese human rights activist Daw Aung San Suu Kyi were approved by the Secretary of the Treasury on May 7, 2009.

Director Edmund C. Moy Medal Design Process

The candidate designs for the medal honoring the Director of the United States Mint were presented to the Citizens Coinage Advisory Committee in June and are scheduled to be presented to the U.S. Commission of Fine Arts in July.

Other Design

Design development for the Congressional Gold Medal honoring the artist Constantino Brumidi was in its initial stages during the fiscal 2009 third quarter.

Legislative Update

111th Congress Convenes

By the end of the third quarter, there were 18 commemorative coin bills and 22 Congressional Gold Medal bills introduced in the House and Senate and referred to committee during the 111th Congress.  The Women Airforce Service Pilots (WASP) Congressional Gold Medal Act (S. 614) was passed by Congress on June 16, 2009, and presented to President Barack Obama for signature on June 24, 2009.

The United States Mint’s Legislative Affairs Office continued or initiated consultations of previously enacted public laws to begin the design and manufacturing process. This included the following:

  • 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 second of four planned 2009 Lincoln Penny exchanges on Capitol Hill on May 15, 2009, and exchanged about 1,000 rolls for Members of Congress, staff and the general public in the Rayburn House Office Building.  There will be four new reverses for the Lincoln one-cent coin in 2009 during the bicentennial of his birth.  The second of those designs features Lincoln sitting on a log reading representing his formative years in Indiana with the inscriptions, “United States of America,” “E Pluribus Unum,” and “One Cent.”  The next two reverse designs will be issued late in the year and will represent his professional life in Illinois and his presidency in Washington, D.C.

Alternative Materials for Circulating Coins

Metal constitutes the largest portion of overall production costs and a dramatic increase in metal prices can have a significant effect on circulating coinage results.  In any environment, changing the composition of all circulating coins to less expensive materials could save the United States Treasury millions of dollars a year without compromising the utility of these coins.  Accordingly, the United States Mint stands ready to work with the Department of the Treasury and the Congress to examine alternatives to mitigate the effect rising metal prices can have on circulating coinage.

Content last updated on