the american numismatic society financial...

THE AMERICAN NUMISMATIC SOCIETY

FINANCIAL STATEMENTS

SEPTEMBER 30, 2000 AND 1999


CONTENTS


Page

Independent auditor's report

1

Financial statements:

Statement of financial position

2

Statement of activities, 2000

3 - 4

Statement of activities, 1999

5 - 6

Statement of changes in net assets

7

Statement of cash flows

8

Notes to financial statements

9 - 18

Additional information:

Schedule of functional expenses, 2000

19

Schedule of functional expenses, 1999

20

INDEPENDENT AUDITOR'S REPORT

To the Council

The American Numismatic Society

New York, New York

We have audited the accompanying statement of financial position of The American Numismatic Society(a nonprofit corporation) as of September 30, 2000 and 1999, and the related statements of activities,changes in net assets and cash flows for the years then ended. These financial statements are theresponsibility of the Society's management. Our responsibility is to express an opinion on these financialstatements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United Statesof America. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of The American Numismatic Society as of September 30, 2000 and 1999, and thechanges in its net assets and its cash flows for the years then ended in conformity with accountingprinciples generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements takenas a whole. The accompanying schedule of functional expenses is presented for the purpose ofadditional analysis and is not a required part of the basic financial statements. Such information hasbeen subjected to the auditing procedures applied in the audit of the basic financial statements and, inour opinion, is fairly stated in all material respects in relation to the basic financial statements taken as awhole.

November 28, 2000,

except for the last paragraph of note 6

as to which the date is February 27, 2001

1.


STATEMENT OF FINANCIAL POSITION


2000

1999

ASSETS

Cash

$ 328,725

$ 60,049Pledges receivable

513,462

370,972

Other receivables and prepaid expenses

154,668

174,122Investments in marketable securities, at fair value

12,588,082

11,884,990

Beneficial interest in perpetual trusts

2,923,261

2,388,520Society collections

-

-

Property and equipment, net (note 7)

8,634,021

8,362,118

Total assets

$ 25,142,219

$ 23,240,771

LIABILITIES AND NET ASSETS

Liabilities:

Accounts payable

$ 357,610

$ 184,707

Net assets:

Unrestricted:

Undesignated

3,594,225

4,530,605Designated for property and equipment

8,634,021

8,362,118

Total unrestricted net assets

12,228,246

12,892,723

Temporarily restricted

6,133,979

4,373,401

Permanently restricted

6,422,384

5,789,940

Total net assets

24,784,609

23,056,064

Total liabilities and net assets

$ 25,142,219

$ 23,240,771

See notes to financial statements.

2.


STATEMENT OF ACTIVITIES

YEAR ENDED SEPTEMBER 30, 2000

Unrestricted

Undesignated

Designated for

property and

equipment

Total

unrestricted

Temporarily

restricted

Permanently

restricted

TotalRevenues, gains and other support:

Contributions

$ 230,792

-$

$ 230,792

$ 1,515,341

$ 97,703

$ 1,843,836Sales, membership dues and other income

162,044

-

162,044

34,420

-

196,464

Investment income

546,382

-

546,382

979,882

-

1,526,264Unrealized gain in perpetual trusts

-

-

-

-

534,741

534,741

Net assets released from restrictions:

Satisfaction of program restrictions

442,456

-

442,456

(442,456)

-

-Satisfaction of building acquisition and

improvement restrictions

-

326,739

326,739

(326,739)

-

-

Total revenues, gains and other support

1,381,674

326,739

1,708,413

1,760,448

632,444

4,101,305

Expenses:

Program services

1,423,699

62,078

1,485,777

-

-

1,485,777Management and general

705,408

-

705,408

-

-

705,408

Fundraising

172,196

-

172,196

-

-

172,196

Total expenses

2,301,303

62,078

2,363,381

-

-

2,363,381

Change in net assets before changes in collectionitems not capitalized

(919,629)

264,661

(654,968)

1,760,448

632,444

1,737,924

(continued)

3.



(continued)


Unrestricted

Undesignated

Designated for

property and

equipment

Unrestricted

Temporarily

restricted

Permanently

restricted

Total


$ (919,629)

$ 264,661

$ (654,968)

$ 1,760,448

$ 632,444

$ 1,737,924

Changes in collection items not capitalized:

Sale of collection items

-

-

-

130

-

130Purchase of collection items

(9,509)

-

(9,509)

-

-

(9,509)

Change in net assets

$ (929,138)

$ 264,661

$ (664,477)

$ 1,760,578

$ 632,444

$ 1,728,545


4.




Unrestricted

Undesignated

Designated for

property and

equipment

Total

unrestricted

Temporarily

restricted

Permanently

restricted

TotalRevenues, gains and other support:

Contributions

$ 153,867

$ 1,300,000

$ 1,453,867

$ 1,082,517

$ 200,000

$ 2,736,384Sales, membership dues and other income

152,465

-

152,465

113,682

-

266,147

Investment income

771,702

-

771,702

886,976

-

1,658,678Unrealized gain in perpetual trusts

-

-

-

-

282,688

282,688

Net assets released from restrictions:

Satisfaction of program restrictions

601,672

-

601,672

(601,672)

-

-Satisfaction of building acquisition and

improvement restrictions

-

2,250,167

2,250,167

(2,250,167)

-

-

Total revenues, gains and other support

1,679,706

3,550,167

5,229,873

(768,664)

482,688

4,943,897

Expenses:

Program services

1,667,960

66,954

1,734,914

-

-

1,734,914Management and general

608,951

-

608,951

-

-

608,951

Fundraising

56,039

-

56,039

-

-

56,039

Total expenses

2,332,950

66,954

2,399,904

-

-

2,399,904


(653,244)

3,483,213

2,829,969

(768,664)

482,688

2,543,993

(continued)

5.



(continued)


Unrestricted

Undesignated

Designated for

property and

equipment

Unrestricted

Temporarily

restricted

Permanently

restricted

Total


$ (653,244)

$ 3,483,213

$ 2,829,969

$ (768,664)

$ 482,688

$ 2,543,993

Changes in collection items not capitalized:

Sale of collection items

-

-

-

1,385

-

1,385Purchase of collection items

(25,387)

-

(25,387)

-

-

(25,387)

Change in net assets before cumulative effect of

change in accounting principle

(678,631)

3,483,213

2,804,582

(767,279)

482,688

2,519,991

Cumulative effect of change in accounting

principle

(60,700)

-

(60,700)

-

-

(60,700)


$ (739,331)

$ 3,483,213

$ 2,743,882

$ (767,279)

$ 482,688

$ 2,459,291


6.


STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED SEPTEMBER 30, 2000 AND 1999

Unrestricted

Undesignated

Designated for

property and

equipment

Total

unrestricted

Temporarily

restricted

Permanently

restricted

Total

Net assets, October 1, 1998

$ 9,112,143

$ 1,036,698

$ 10,148,841

$ 5,140,680

$ 5,307,252

$ 20,596,773


(739,331)

3,483,213

2,743,882

(767,279)

482,688

2,459,291

Transfers

(3,842,207)

3,842,207

-

-

-

-

Net assets, September 30, 1999

4,530,605

8,362,118

12,892,723

4,373,401

5,789,940

23,056,064


(929,138)

264,661

(664,477)

1,760,578

632,444

1,728,545

Transfers

(7,242)

7,242

-

-

-

-

Net assets, September 30, 2000

$ 3,594,225

$ 8,634,021

$ 12,228,246

$ 6,133,979

$ 6,422,384

$ 24,784,609


7.


STATEMENT OF CASH FLOWS

YEARS ENDED SEPTEMBER 30, 2000 AND 1999

2000

1999Cash flows from operating activities:


$ 1,728,545

$ 2,459,291Adjustments to reconcile increase in net assets to net cash

(used in) operating activities

Net (gains) losses on marketable securities

(1,160,364)

(1,266,757)Unrealized (gains) on perpetual trusts

(534,741)

(282,688)

Depreciation and amortization

62,078

66,954Inventory writedown

-

22,378

Noncash contribution

-

(1,300,000)Contributions restricted for endowments

(97,703)

(200,000)

(Increase) decrease in operating assets:

Pledges receivable

(142,490)

(253,549)Other receivables and prepaid expenses

19,454

(54,666)

Increase (decrease) in operating liabilities:

Accounts payable and accrued expenses

(172,903)

135,816

Net cash (used in) operating activities

(298,124)

(673,221)

Cash flows from investing activities:

Purchase of marketable securities

(2,658,354)

(17,548,711)Proceeds from sales of marketable securities

3,461,432

24,058,012

Purchase of property and equipment

(333,981)

(6,092,381)

Net cash provided by investing activities

469,097

416,920

Cash flows from financing activities:

Contributions permanently restricted for endowments

97,703

200,000

Net cash provided by financing activities

97,703

200,000

Net increase (decrease) in cash

268,676

(56,301)

Cash, beginning of year

60,049

116,350

Cash, end of year

$ 328,725

$ 60,049

Noncash investing and financing activities:

In connection with the purchase of the William Street building in 1999, the seller contributed$1,300,000 of the purchase price to the Society.


8.


NOTES TO FINANCIAL STATEMENTS


1.

Organization and purpose:

The American Numismatic Society ("the Society") is a nonprofit organization organized in 1858and incorporated in 1865. The mission of the Society is to be the pre-eminent nationalinstitution advancing the study and public appreciation of coins, medals and related objects of allcultures as historic and artistic documents, by maintaining the foremost numismatic collectionand library; by supporting scholarly research and publications; and by sponsoring educationaland interpretive programs for diverse audiences. Items in the Society collections are availablefor loan to other museums for exhibits on particular themes. The Society's revenues areprimarily derived from contributions and investment income.

2.

Summary of significant accounting policies:

Basis of accounting:

The accompanying financial statements have been prepared on the accrual basis. Accordingly,revenues and their related assets are recognized when earned, and expenses and their relatedliabilities are recognized when incurred.

Net assets:

The Society reports information regarding its financial position and activities according to threeclasses of net assets: unrestricted net assets, temporarily restricted net assets, and permanentlyrestricted net assets.

Unrestricted net assets are neither permanently restricted nor temporarily restricted by donor-imposed restrictions. As reflected in the accompanying statement of financial position, theSociety has designated its unrestricted net assets into the following two categories:

Undesignated net assets are net assets that are an integral part of the Society's programs and

supporting activities and net assets designated for investments (including realized capital gains

and unrealized appreciation on permanently restricted net assets in the absence of donor

imposed restrictions on either income or capital appreciation.) These net assets are

resources over which the Council has discretionary control to use for operations.

Designated for property and equipment represents fixed assets constructed or acquired with

donor specified contributions or purchased from general operating support funds.

Temporarily restricted net assets contain donor imposed restrictions that permit the Society touse up or expend the donated assets as specified. These restrictions may or will be met eitherby actions of the Society and/or the passage of time.

9.




2.

Summary of significant accounting policies (continued):

Net assets (continued):

Permanently restricted net assets contain donor-imposed restrictions that stipulate that theresources be maintained permanently but permit the Society to use or expend part or all of theincome from the donated assets for specified or unspecified purposes.

Contributions:

Contributions, including promises to give, are recorded as restricted support if they are receivedwith donor stipulations that limit the use of the donated assets. When a donor restrictionexpires, that is, when a stipulated time restriction ends or purpose restriction is accomplished,temporarily restricted net assets are reclassified to unrestricted net assets and reported in thestatement of activities as net assets released from restrictions. It is the Society's policy to recordtemporarily restricted contributions received and expended in the same accounting period in thetemporarily restricted net asset category.

The Society recognizes contributions restricted by a donor for the acquisition or construction oflong-lived assets as temporarily restricted support and reclassifies such support to unrestrictednet assets, as net assets released from restriction, when the asset is acquired or placed inservice.

Nonmonetary contributions (stocks, bonds, etc.) are recorded at estimated fair value at date ofreceipt.

Use of estimates in the preparation of financial statements:

The preparation of financial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements and the reported amount of incomeand expenses during the reporting period. Actual results could differ from those estimates.

Investments in marketable securities:

The Society carries investments in debt securities and equity securities that have readilydeterminable fair values, at fair value in the statement of financial position and recognizesincreases and decreases in fair values in the statement of activities. Realized gains and lossesand unrealized appreciation and depreciation on security transactions are allocated amongindividual restricted and unrestricted funds on the basis of the respective percentage share in thefund balance which exists at the beginning of each month in which income and realized andunrealized gains or losses are earned.

10.




2.


Investments in marketable securities (continued):

Purchases and sales of fixed-income and equity securities are reflected on a trade-date basis.Investment income is recorded on an accrual basis. Dividends are accrued based upon ex-dividend dates.

Beneficial interest in perpetual trusts held by third parties:

The Society is the beneficiary of certain perpetual trusts under which the trust income is receivedannually for unrestricted use. The assets are held by trustees, which are separate entities. TheSociety's beneficial interest in these perpetual trusts are recorded based on the fair value of theassets held in the trusts as reported by the trustees and are reported as permanently restrictednet assets. Annual changes in such amounts are shown as permanently restricted unrealizedgains or losses.

Society collections:

The Society's collections, acquired through purchase and contributions, are not recognized asassets on the statement of financial position. Purchases of collection items are recorded in theyear in which the items were acquired as decreases in unrestricted, temporarily restricted orpermanently restricted net assets if the assets used to purchase the items were restricted by thedonors. Contributed collection items are not reflected in the financial statements. Proceedsfrom deaccessions, which are reflected as increases in the appropriate net asset class, are usedto acquire other items for the collection. Collection items include coins, medals, paper currency,library books and other objects and documents. The current value of the collections is notreadily determinable.

Property and equipment:

Property and equipment are recorded at cost less accumulated depreciation. The cost ofmaintenance and repairs is charged to expense as incurred. Significant renewals andreplacements which substantially extend the lives of the assets are capitalized.

Depreciation is provided principally using straight-line methods over the estimated useful lives ofthe assets as follows:

Computer equipment

5-10 Years

Furniture and office equipment

5-10 Years

Building - Broadway

100 Years

11.




2.


Property and equipment (continued):

The estimated useful life of the William Street building will be determined after the completion ofthe renovations and the building is placed in service.

The land underlying the Broadway building was acquired by deed in 1906, 1914 and 1924.The land has been carried at a nominal value, which amount has not been adjusted in connectionwith the adoption of Statement of Financial Accounting Standards No. 116 Accounting forContributions Received and Contributions Made (SFAS No. 116) in 1995. The Societybelieves that the original fair value of the land when deeded is not material to the financialstatements.

Income taxes:

No provision for federal and state income taxes has been provided on the earnings of theSociety since it has received an exemption from income taxes under Section 501(c)(3) of theInternal Revenue Code. The Society has been classified as an organization that is not a privatefoundation under Section 509(a)(2) of the Internal Revenue Code.

Donated services:

The Society received donated services from its officers, directors and other volunteers. Noamounts are reflected in the financial statements for these services, as there is no objective basisavailable by which to measure the value of such services.

3.

Concentrations of credit risk:

Financial instruments that potentially subject the Society to concentrations of credit risk consistprincipally of cash and money market accounts in financial institutions and brokerage accounts,which may exceed the federal depository insurance coverage limit. The Society maintains thecash accounts with high quality financial institutions to minimize risk.

12.




4.

Pledges receivable:

Pledges receivable consist of the following:

2000

1999

Restricted to:

Education

-$

$ 10,000

Building purchase and renovation

513,462

360,972

Total

$ 513,462

$ 370,972

Amounts due in:

Less than one year

$ 175,000

$ 100,000

One to five years

379,072

310,000 554,072

410,000

Less discounts to present value

40,610

39,028

Total pledges receivable

$ 513,462

$ 370,972

A discount rate of 6% was used to determine the net present value of pledges receivable inmore than one year.

5.

Investments in marketable securities:

Marketable securities consist of the following:

2000

1999 Cost

Fair value

Cost

Fair value

Common stocks

$ 9,533,305

$ 10,978,560

$ 5,833,579

$ 5,382,325 Mutual funds

1,175,417

1,122,436

3,183,499

3,030,689

Money market

funds

487,086

487,086

3,471,976

3,471,976

$ 11,195,808

$ 12,588,082

$ 12,489,054

$ 11,884,990

13.




5.

Investments in marketable securities (continued):

The following is a summary of the relationship between the carrying values and fair values ofinvestment assets:

2000

1999

Cost

Fair value

Excess

(deficiency)

of fair value

over cost

Excess

(deficiency)

of fair value

over cost

Balance, beginning of

year

$ 12,489,054

$ 11,884,990

$ (604,064)

$ (550,568)

Balance, end of year

$ 11,195,808

$ 12,588,082

1,392,274

(604,064)

Net change in fair value

1,996,338

(53,496) Net realized gains

(losses) on sales of

marketable securities

(835,974)

1,320,253

Net gain on marketable

securities

$ 1,160,364

$ 1,266,757

Investment income for the years ended September 30, 2000 and 1999 consists of the following:

2000

1999

Gains on marketable securities, net

$ 1,160,364

$ 1,266,757 Interest and dividend income

395,748

380,025

Management fees paid

(95,495)

(42,872) 1,460,617

1,603,910

Distributions from perpetual trusts

65,647

54,768

$ 1,526,264

$ 1,658,678

14.




6.

Society collections:

The Society's collections consist primarily of coins, medals and manuscripts. They arecatalogued, preserved, and cared for, and activities verifying their existence and assessing theircondition are performed. Various coins were lent to the Society by several organizations. Thecollection of coins lent to the Society had a current value assigned by the lenders ofapproximately $85,000 and $95,000 at September 30, 2000 and 1999, respectively, notincluding coins loaned by the Hispanic Society of America which have not been valued.

The Society also has coins on loan with several organizations. Those coins that were lent tovarious organizations by the Society had a management estimated current value ofapproximately $2,198,000 and $2,209,000 at September 30, 2000 and 1999, respectively.

The Society has been involved in litigation to recover 129 early date U.S. cents that wereswitched and/or removed illicitly from its possession many years ago. On November 18, 1997,a judgment was entered in favor of the Society, confirming its title to 38 of the coins sought,together with the current value, in the amount of $229,500, for 20 of the Society's coins sold bythe possessor. In addition, the possessor has filed a claim to recover the substituted coinswhich are in the possession of the Society. This action was stayed pending appeal in the firstcase. As originally agreed with counsel, fees for legal services on behalf of the Society wouldbe paid by the Society only from the proceeds from the disposition of the coins that weresubstituted for those illicitly removed and subsequently recovered. During the year endedSeptember 30, 1999, the Society sold $40,000 of the substituted coins and remitted theproceeds to legal counsel. This income and expense is included in the statement of activities for1999. Eighteen illicitly taken coins have been voluntarily returned by others. The Society iscontinuing its efforts to recover the remaining 53 coins.

As of February 27, 2001, the case has been settled and negotiations are presently underway todetermine the distribution of the settlement.

15.




7.

Property and equipment:

Property and equipment are summarized as follows:

2000

1999

Building - Broadway and 155th Street $ 911,787

$ 911,787 Building - 140 William Street 5,300,177

4,973,438

Furniture and office equipment 663,681

656,439 6,875,645

6,541,664

Accumulated depreciation

(1,241,625)

(1,179,547) 5,634,020

5,362,117

Land - 140 William Street

3,000,000

3,000,000 Land - Broadway and 155th Street

1

1

Net book value $ 8,634,021

$ 8,362,118

Depreciation and amortization expense amounted to $62,078 and $66,954 for the years endedSeptember 30, 2000 and 1999, respectively.

The building at Broadway and 155th Street is listed on the National Register of Historic Places.In accordance with that listing, approval from the National Park Service is required prior to anysubstantial modifications to the existing building. The Society is examining the possibility ofselling this building to another nonprofit organization in connection with the proposed relocationto the William Street building.

The Society plans to perform renovations to the William Street building. Currently, architectsare developing cost estimates for the Council's review. The Society plans to finance therenovations with a capital campaign and development activities. However, no final decision hasbeen reached on the extent of the renovations as of the date of this report.

16.




8.

Temporarily restricted net assets:

As of September 30, 2000 and 1999, temporarily restricted net assets are available for thefollowing purposes:

2000

1999

Coin and medal purchases $ 691,589

$ 612,032

Library purchases 206,026

177,262 Education 678,725

550,104

Departmental support 2,811,498

2,381,959 140 William Street:

Museum renovations 1,746,141

492,044 Development -

75,000

Public relations -

75,000 Special events -

10,000

$ 6,133,979

$ 4,373,401

9.

Permanently restricted net assets:

As of September 30, 2000 and 1999, permanently restricted net assets are available for thefollowing purposes:

2000

1999

Program activities:

Museum operations

$ 3,138,423

$ 2,603,682 Library purchases

112,668

112,668

Coin purchases

76,701

76,701 Education

630,023

599,998

Computer related activities

780,600

780,600 Medals purchases

8,001

8,001

Curators

1,635,968

1,568,290 Other

40,000

40,000

$ 6,422,384

$ 5,789,940

17.




10.

Retirement plan:

The Society maintains a retirement benefits plan that covers all eligible employees throughdefined contributions by the Society for the purchase of individual annuity contracts withTeachers Insurance and Annuity Association/College Retirement Equities Fund. The plan isfunded as accrued, and all full-time employees are eligible to participate. Contributions to theplan amounted to $76,265 and $110,614 for the years ended September 30, 2000 and 1999,respectively.

11.

Related party transactions:

The Society paid investment advisory fees of $95,495 and $42,872 for the years endedSeptember 30, 2000 and 1999, respectively to a firm in which a member of the Council is aprincipal.

12.

Employee severance package:

During the year ended September 30, 2000, the Society adopted an early buy-out plan forcertain long-time employees. Nine employees accepted the plan or variations thereof. The planprovided for guaranteed payment of salary and health benefits for specified periods of time.The estimated cost of the payments is $339,939 and is included in the accompanying 2000financial statements.

18.


SCHEDULE OF FUNCTIONAL EXPENSES


Program services

Management and

general

Fundraising

Total

Salaries, benefits and payroll taxes

$ 875,919

$ 134,090

$ 70,858

$ 1,080,867Employee severance package

-

339,939

-

339,939

Professional and consulting fees

212,436

77,047

69,384

358,867Supplies

12,131

9,281

11,427

32,839

Telephone

19,295

5,391

366

25,052Postage and shipping

16,269

4,546

1,616

22,431

Occupancy, Broadway

128,648

9,329

-

137,977Occupancy, William Street

-

80,886

-

80,886

Printing and publications

107,675

5,573

9,812

123,060Conferences, conventions, meetings and travel

5,710

14,817

8,733

29,260

Membership dues

4,741

-

-

4,741Awards and grants

15,250

-

-

15,250

Rental and maintenance of equipment

6,488

7,290

-

13,778Depreciation and amortization

62,078

-

-

62,078

Exhibition and lecture

19,137

3,923

-

23,060Other service fees

-

13,296

-

13,296

$ 1,485,777

$ 705,408

$ 172,196

$ 2,363,381

19.


SCHEDULE OF FUNCTIONAL EXPENSES


Program services

Management and

general

Fundraising

Total

Salaries, benefits and payroll taxes

$ 962,494

$ 353,123

$ 22,780

$ 1,338,397Professional and consulting fees

228,314

33,660

20,954

282,928

Supplies

94,400

17,652

6,037

118,089Telephone

20,889

5,585

379

26,853

Postage and shipping

43,025

12,021

816

55,862Occupancy, Broadway

88,644

9,849

-

98,493

Occupancy, William Street

-

143,028

-

143,028Printing and publications

87,369

18,880

3,530

109,779

Conferences, conventions, meetings and travel

58,168

11,506

1,296

70,970Membership dues

4,525

-

-

4,525

Awards and grants

44,700

-

-

44,700Rental and maintenance of equipment

13,054

3,647

247

16,948

Depreciation and amortization

66,954

-

-

66,954Write down of inventory of publications

22,378

-

-

22,378

$ 1,734,914

$ 608,951

$ 56,039

$ 2,399,904

20.

the american numismatic society financial...

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