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  UNITED STATES MINT

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***Quarterly Financial Report of the United States Mint***

***Commemorative Coin Program,***

***P. L. 104-208, as of June 30, 2001***

***INTRODUCTION 1***

#### **PROGRAM-WIDE SUMMARY 2** 

#### **FINANCIAL REPORTING 3**

#### **LIBRARY OF CONGRESS BICENTENNIAL 3**

#### **LEIF ERICSON MILLENNIUM 4**

#### **U.S. CAPITOL VISITORS CENTER -- FY 2001 6**

#### **AMERICAN BUFFALO SILVER DOLLAR -- FY 2001 7**

#### **2002 WINTER OLYMPIC GAMES 8**

#### **United States Military Academy Bicentennial 9**

#### **CONCLUSION .9**

***[INTRODUCTION]{.underline}***

Public Law 104-208, the *Commemorative Coin Reform Act of 1996*,
requires the Mint to report the quarterly status of commemorative coin
programs. The law promotes and enhances recipient organization
fundraising efforts by apportioning the financial risks of commemorative
coin programs between the recipient organization and the U.S. Mint's
Public Enterprise Fund. The law also assures that the U.S. Mint recovers
the costs of operating these coin programs. In addition, the law
requires recipient organizations to file audited financial statements,
and it requires the Mint to report quarterly on the status of
commemorative coin programs. This---the Mint's eighteenth quarterly
commemorative coin report---discusses programs reporting significant
activity from April 1 to June 30, 2001.

***[PROGRAM-WIDE SUMMARY]{.underline}***

Modern commemorative coins authorized by Congress and produced by the
U.S. Mint date from the introduction of the George Washington 250th
Anniversary Half Dollar in 1982. Congress authorized a total of 39
commemorative coin programs between 1982-2001, honoring American people,
places, events, and institutions. Surcharges from the sales of these
coins helped fund a variety of organizations and projects that benefit
the community at large. Profits generated through the sale of modern
commemorative coins are placed in the Mint's Public Enterprise Fund,
which returns gains exceeding the Mint's operating requirements to the
Department of the Treasury's General Fund. These profits then benefit
the American people by reducing the amount of new Federal debt issued.
U.S. Mint commemorative coins have generated nearly \$412.8 million in
surcharges over the past 19 years for many worthy foundations.

Public Law 104-208, the *Commemorative Coin Reform Act of 1996*, links
public funding of special projects to demonstrated private support. The
law makes coin program beneficiaries partners in bearing the risks of
commemorative coin programs, and it assures that the U.S. 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's well-being remains fragile. To
ensure that commemorative programs continue to reap the benefits of the
reforms, the U.S. Mint must continue to execute and oversee them in a
conscientious, prudent, and businesslike manner.

As of June 30, 2001, sales of the Library of Congress, Leif Ericson,
Capitol Visitor Center (CVC), and Buffalo Commemorative Coin Programs
generated revenues of \$44.3 million. Coin sales for the Library of
Congress Bicentennial ended on December 31, 2000, as directed by the
authorizing legislation, with final sales of nearly \$20.8 million.
Sales of the Leif Ericson Millennium ended February 28, 2001, with total
sales of \$8.9 million. The U.S. Capitol Visitor Center coin program has
generated \$11.4 million in sales. The most recent program, the American
Buffalo Silver Dollar, generated \$3.2 million in sales for orders
shipped this quarter. It is expected total sales for this program will
reach \$16.5 million.

Total surcharge payments disbursed as of June 30, 2001 are \$2.21
million. The breakdown of surcharges disbursed from program inception
through the third quarter ended June 30, 2001 is as follows:

  ------------------------------------ ----------------------------------
  Benefiting Organization              Surcharge Disbursed

  Library of Congress                  \$ 2,205,642

  Leif Ericson                         0

  Capitol Visitor Center               0

  Buffalo                              0

  Total Surcharge Disbursed            \$ 2,205,642
  ------------------------------------ ----------------------------------

There were no surcharge disbursements during the third quarter ending
June 30, 2001.

On May 4, 2001, United States Mint Director Jay W. Johnson hosted a
ceremony at the U.S. Mint in Denver to strike the first American Buffalo
Commemorative Coin.  The Mint made the coin available through its
website on June 11, and the coin sold out within the first two weeks
after being offered. A portion of the proceeds from the sale of the one
dollar silver commemorative coin will help fund the opening of the
National Museum of the American Indian. Work is underway on the 2002
Winter Olympic Games and the United States Military Academy Bicentennial
commemorative programs.

***[FINANCIAL REPORTING]{.underline}***

The attached financial statements provide quarterly and cumulative
program data.

![](media/image2.png){width="2.8in"
height="1.9090277777777778in"}***[LIBRARY OF CONGRESS
BICENTENNIAL]{.underline}***

# 

## Program Highlights

To commemorate the bicentennial of the Library of Congress on April 24,
2000, Congress authorized the production of 500,000 silver dollars and
100,000 \$5 gold coins. Legislation permitted the Secretary of the
Treasury to substitute 200,000 \$10 gold-and-platinum coins for the \$5
gold coins. With the urging of the Library of Congress, the Secretary
approved of this substitution, and the Mint struck the nation's
first-ever bimetallic platinum and gold commemorative coin. Designs
finalized and reviewed by the Citizens Commemorative Coin Advisory
Committee (CCCAC) and the Commission of Fine Arts depict various themes
emblematic of the Library of Congress, including the beautiful platinum
and gold depiction of Minerva and the Torch of Learning and the
magnificent Thomas Jefferson Building. Surcharges are paid to the
Library of Congress Trust Fund Board for bicentennial programs,
educational outreach and other activities.

## Marketing Activities 

Since the Library of Congress Commemorative Coin Production ended on
December 31, 2000, as required by P.L. 105-268, there were neither
marketing nor sales activities to report during third quarter.

## Analysis of Financial Position

As of June 30, 2001, more than 286,500 coins were sold, generating
revenues of approximately \$20.8 million including surcharges of \$2.99
million. Estimated profits of \$3.7 million exceed potential unrecovered
expenses of \$341,800. The Mint will return these profits to the
Department of the Treasury's General Fund. Cost of goods sold totaled
\$9.7 million. Selling, general and administrative expenses were \$4.4
million. The Mint has distributed approximately \$2.21 million in
surcharges to the recipient organization to date.

## Manufacturing/Packaging Operations

Production period ended on December 31, 2000, as required by P.L.
105-268.

![](media/image3.png){width="3.1in" height="2.325in"}***[LEIF ERICSON
MILLENNIUM]{.underline}***

## 

## Program Highlights

The Leif Ericson Commemorative Coin Program was formally launched on
June 21, 2000, at the Smithsonian\'s National Museum for Natural History
at its popular Viking Exhibit. Approximately 842,000 customers were
selected, based on their expected propensity to purchase, to receive the
Leif Ericson direct mail package. This was supported with direct
response print advertisements in numismatic trade publications.

The second U.S. commemorative coin program of 2000, the Leif Ericson
Millennium Commemorative Coin Program commemorates the 1000-year
anniversary of Leif Ericson's voyage to the New World. Public Law
106-126 authorized the mintage of up to 500,000 U.S. silver dollar coins
(proof silver and uncirculated versions) in conjunction with the
issuance of up to 150,000 Icelandic 1000 krónur silver coins (proof
silver only). Qualifying surcharges will be paid to the Leifur Eiriksson
Foundation for the purpose of funding student exchanges between the
United States and students of Iceland.

This program represents a historic "first of its kind" for the U.S. Mint
-- providing collectors with the opportunity to purchase jointly issued
domestic and foreign commemorative coins. The silver dollar and 1000
krónur silver coins, designed by the U.S. Mint and the Republic of
Iceland respectively, each portrays a heroic representation of Leif
Ericson on the obverse. The reverse of the U.S. coin depicts his Viking
ship under full sail. The reverse of the Icelandic 1000 krónur portrays
the eagle, dragon, bull, and giant from the Icelandic Coat of Arms. By
request, the U.S. Mint produced and marketed the Icelandic 1000 krónur
silver coin on behalf of the Governors of the Central Bank of Iceland.

## Marketing Activities

## 

In accordance with the authorizing legislation, coin production for this
commemorative program ended December 31, 2000. The remaining coins were
sold through February 2001. Consequently, no marketing or sales
activates occurred during the third quarter. Per the Memorandum of
Understanding signed between the United States Mint and the Central Bank
of Iceland, the U.S. Mint recently transferred all Icelandic coin dies,
hubs, and plasters to the Republic of Iceland.

## 

## Analysis of Financial Position

As of June 30, 2001, sales of over 274,000 coins were realized,
generating revenues of nearly \$8.9 million, including surcharges in
excess of \$2.7 million. Estimated profits of nearly \$1.5 million
exceed potential unrecovered expenses of approximately \$121,000. Cost
of goods sold totaled \$2.4 million. Selling, general and administrative
expenses were \$2.2 million. As of this report, the Foundation has not
met the matching funds criterion established by the *Commemorative Coin
Reform Act of 1996.* That requirement stipulates that the Mint must
withhold surcharges until all program-operating costs have been
recovered, and until the designated beneficiary has raised other monies
from private sources equal to the maximum potential program
surcharges*.* However, in keeping with the Mint's memorandum of
understanding with the Central Bank of Iceland, surcharges earned on the
Iceland version of the coin amounted to \$1 million. Profits in excess
of potential unrecovered expenses will be deposited to the Department of
the Treasury's General Fund.

## Manufacturing/Packaging Operations

Coin production for this commemorative program ended December 31, 2000,
as authorized by P.L. 106-126.

***[U.S. CAPITOL VISITORS CENTER -- FY 2001]{.underline}***

![](media/image4.png){width="1.4402777777777778in"
height="1.4402777777777778in"}***Program Highlights***

Authorized by Public Law 106-126, the U.S. Capitol Visitor Center (CVC)
Commemorative Coin Program commemorates the first convening of Congress
in the Capitol building. Congress has established mintages of 100,000
gold coins; 500,000 silver dollar coins; and 750,000 clad half-dollar
coins. The Secretary of the Treasury selected design concepts for the
U.S. Capitol Visitor Center Commemorative Coins after the Citizens
Commemorative Coin Advisory Committee (CCCAC), the Commission of Fine
Arts, and the U.S. Capitol Preservation Commission reviewed them.
Program promotional artwork features William Russell Birch's 1803
watercolor, depicting the first Capitol's completed north wing. The
Birch watercolor is one of the few remaining pieces of artwork that
depicts the Capitol building when Congress first convened there. The
Senate and House of Representatives of the second session of the Sixth
Congress met on November 22, 1800, for a joint session addressed by
President John Adams. Surcharges from the sale of the coins go toward
the construction, maintenance and preservation of the U.S. Capitol
Visitor Center.

## Marketing Activities

## 

The three-coin CVC Commemorative Coin Program went on sale March 7,
2001, and remained on sale through the third quarter. The pre-issue
period for this program ended on April 20, 2001.

The Mint supported the first CVC mailing using direct response
advertising in select numismatic trade publications. In addition, the
Mint conducted a second mailing to its mailing list addressees in an
effort to stimulate sales before the end of the pre-issue period.

As stated in our last report, a second mailing to the same customer list
was sent out on April 4^th^. The brochure offered customers a total of
14 different product options, all at varying price points.

The CVC program was also prominently featured on the Mint's home page
with a special permanent banner posted on the home page to help
purchasers find the CVC coins easily.

The Mint also printed and distributed custom-designed "take-one"
brochures for the Capitol Visitor Center Working Group for use in their
affinity mailings.

## Analysis of Financial Position

As of June 30, 2001, the Mint shipped nearly 270,000 coins, generating
program revenues of more than \$11.4 million, including surcharges of
nearly \$2.9 million. Estimated profits of \$930,000 covered the
potential unrecovered expenses of \$316,000. Cost of goods sold totaled
\$4.1 million. Selling, general and administrative expenses were \$3.5
million. Third quarter revenues posted a profit of nearly \$370,000. As
of this report, the U.S. Capitol Preservation Commission has not met the
matching funds criterion established by the *Commemorative Coin Reform
Act of 1996.* That requirement stipulates that the U.S. Mint must
withhold surcharges until it recovers all program operating costs, and
until the designated beneficiary has raised other monies from private
sources equal to the maximum potential program surcharges*.*

## Manufacturing/Packaging Operations

The West Point Mint produced only uncirculated CVC commemorative coins
during the quarter ending June 30, 2001. Of the 2085 uncirculated coins
produced, 2033 were acceptable coins and 52 were unacceptable,
representing a reject rate of 2.4%.

***[AMERICAN BUFFALO COMMEMORATIVE COIN - FY 2001]{.underline}***

## 

## Program Highlights

## ![](media/image7.png){width="3.1381944444444443in" height="1.3756944444444446in"}

Authorized by Public Law 106-375, the American Buffalo Coin
Commemorative Coin Act of 2000 commemorates the opening of the
Smithsonian Institution's National Museum of the American Indian.
Congress established a mintage limit of 500,000 silver dollar coins. The
second commemorative coin program of 2001, the American Buffalo Silver
Dollar features a reproduction of one of the most famous and beloved
designs among coin collectors -- the James Earle Fraser Buffalo nickel.

Congress directed the Mint to pay the surcharges from this coin program
to the National Museum of the American Indian (NMAI) to commemorate the
opening of the museum and to supplement the museum's endowment and
educational outreach funds. The Mint convened a panel of numismatists
and buffalo nickel experts to discuss the importance of maintaining the
integrity of the original James Earle Fraser Buffalo nickel design. The
Citizens Commemorative Coin Advisory Committee (CCCAC) and the
Commission of Fine Arts reviewed and endorsed the proposed coin designs,
and the Secretary of the Treasury approved them.

## Marketing Activities

The U.S. Mint formally launched the second and final modern
commemorative coin for 2001on June 7, 2001. On the day of the launch,
*Fox Morning News* and the *Today Show* featured the coin, helping it
receive national exposure. Online sales for the American Buffalo Coin
began on June 11^th^ at [www.usmint.gov](http://www.usmint.gov/)

As a result of the pre-launch publicity generated for the program, the
Mint was able to successfully sell out the entire 500,000-coin mintage
within the first two weeks of the pre-issue period. The unprecedented
demand experienced by this program resulted in its becoming the
fastest-selling U.S. Mint modern commemorative coin in the Mint's
history.

The Mint mailed a four-color, direct mail package featuring Native
American and western themes to its active commemorative coin customer
list. The Mint supported the direct mail piece with direct response
print advertising in the major numismatic publications. In addition, the
Mint placed a small number of special affinity ads in the following
magazines/newspapers: *Cowboys and Indians*, *Native Peoples*, *Indian
Country*, and the *Lakota Journal*.

## Analysis of Financial Position

As of June 30, 2001, the Mint shipped over 98,000 coins, generating
revenues of more than \$3.2 million for the quarter, including
surcharges of nearly \$984,000. The Mint anticipates shipping all of the
coins by the end of August. Estimated profits of \$22,000 failed to
cover the potential unrecovered expenses of \$460,000. Because the Mint
only recently launched this program, it anticipates that future program
revenues likely will offset the potential unrecovered expenses. In fact,
total program revenues are estimated at \$16.5 million. Cost of goods
sold totaled \$1.0 million. Selling, general and administrative expenses
were \$1.2 million. The Mint posted third quarter profits of \$22,000
for this program. As of this report, NMAI has not met the matching funds
criterion established by the *Commemorative Coin Reform Act of 1996.*
That requirement specifies that the U.S. Mint must withhold surcharges
until it has recovered all program operating costs, and until the
designated beneficiary has raised other monies from private sources
equal to the maximum potential program surcharges*.*

***[2002 WINTER OLYMPIC GAMES]{.underline}***

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 has been very responsive to past concerns, and
the 2002 Games will feature a single coin design for the obverse and
reverse of each silver dollar and gold five-dollar coins.

The Citizen's Commemorative Coin Advisory Committee and the Commission
for Fine Arts reviewed the coin designs for the upcoming 2002 Winter
Olympic Commemorative Coin Program. The Mint presented the coin design
concepts to the Commission of Fine Arts on June 21, 2001. The Mint
submitted final design concepts to the Secretary of the Treasury for
final approval.

Congress directed the 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 the U.S. Olympic Committee. Issuance of the
coin is targeted for January 1, 2002. Previous U.S. Mint Commemorative
coin programs honoring the Olympics have raised over \$130.0 million for
our Olympic athletes and programs.

***[UNITED STATES MILITARY ACADEMY BICENTENNIAL]{.underline}***

The United States 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, United States Military Academy, to assist the Association of
Graduates' efforts in providing direct support to the academic,
military, physical, moral, and ethical development programs of the Corps
of Cadets, United States Military Academy. The U.S. Bullion Depository
at West Point will strike the coins. Issuance of the coin is targeted
for March 16, 2002. The Mint presented the coin design concepts to the
Commission of Fine Arts on April 19, 2001. The Secretary of the Treasury
has approved the designs.

***[CONCLUSION]{.underline}***

The Mint marketed two commemorative coin programs during the third
quarter of FY 2001. The Capitol Visitor Center Commemorative Coin
program reported a profit this quarter of \$369,000 and has generated
\$11.4 million in revenues to date. Similarly, the American Buffalo Coin
Commemorative Coin program reported a profit of \$22,000 and sold out
within the first two weeks of the pre-issue period. To date, the Capitol
Visitor Center has generated surcharges from the sale of coins of nearly
\$3.0 million as established by the *Commemorative Coin Reform Act of
1996*. Surcharges for the American Buffalo Coin Commemorative Coin
program will be reported in the next quarterly report. The Mint looks
forward to working in partnership with the Salt Lake Organizing
Committee for the 2002 Winter Olympic Games Commemorative Coin, and the
United States Military Academy Association of Graduates for the United
States Military Academy Bicentennial Commemorative Coin, to help
commemorate these programs and to maximize the returns to the benefit of
these organizations and the American public.