UNITED STATES MINT 2011 ANNUAL REPORT
 
2011 SEPTEMBER 11 NATIONAL MEDAL 

On the cover: The 2011 September 11 National Medal commemorates the 10th anniversary 

of the terrorist attacks on the United States. Surcharges from this two-year Congressionally 

mandated program are authorized to be paid to the National September 11 Memorial 

and Museum at the World Trade Center. One side of the silver medal features Lady Liberty 

holding the Lamp of Remembrance. Behind her are beacons of light. Lady Liberty, the lamp 

and the light symbolize loss, as well as the resilience and triumph of survivors. The other side 

of the medal depicts an eagle, symbolizing strength, against a backdrop of cascading water, 

symbolizing peace, serenity, healing, and the continuity of life. 
 

 

 

 

Richard A. Peterson 

United States Mint 

Deputy Director 

DEPUTY DIRECTOR’S LETTER
 

I am pleased to present the United States Mint’s 2011 Annual Report. Throughout a challenging year, the men 

and women at each of our facilities have delivered outstanding results. It is on their behalf that I detail our 

accomplishments and preview the road ahead. 

Federal law requires the United States Mint (Mint) to operate two fiscally separate programs: circulating coins and 

numismatic products. Our numismatic program comprises three principle segments: collectible coins, precious 

metal bullion investment-grade coins, and national medals. Our mission is somewhat different than a private sector 

corporation, but we keep detailed scores on ourselves (and are audited) in much the same way. In FY 2011, our 

circulating coin, numismatic collectible, and bullion coin programs experienced significant revenue growth. 

Circulating revenues grew 25.7 percent, from $618.2 million to $776.9 million. Precious metal bullion revenues 

grew 21.6 percent, from $2,855.4 million to $3,471.4 million. Numismatic revenues grew 74.7 percent, from $413.1 

million to $721.7 million. Our circulating seigniorage (earnings) grew 16.0 percent, from $300.8 million to $348.8 

million. Bullion net income grew 19.2 percent, from $55.2 million to $65.8 million. Finally, numismatic net income 

grew 127.3 percent, from $49.8 million to $113.2 million. 

Before discussing each program in more detail, I would like to highlight some of the other key milestones of FY 2011: 

• Circulating coin shipments recovered to 7.4 billion coins. 

• Precious metal bullion sales set record highs for both revenue and total ounces sold. 

• We resumed silver bullion production in San Francisco – the first time we have made bullion there 

since 1998. 

• Numismatic revenues set a record high driven, in part, because of the return of the 2010 American Eagle 

Silver Proof Coin and early calendar year release of our 2011 United States Mint Proof Sets®, United 

States Mint Silver Proof Sets®, and United States Uncirculated Coin Sets®. 

• We signed a new five-year collective bargaining agreement with our union. 

• We invested in our future by making significant progress on our primary customer-centered initiative: 

a new order fulfillment system with state-of-the-art e-commerce features. 

• We are also progressing on an important initiative for the entire Nation: a research and development 

effort to explore new, more cost-effective metallic materials for our circulating coins. 

• Furthering our commitment to green initiatives, our Headquarters building in Washington, D.C. became 

ENERGY STAR certified. 

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The United States Mint ranked 57 out of 240 agencies and bureaus 

in the Best Places to Work in the Federal Government in 2011, 

a significant improvement from 2010. The Mint was recognized 

by the Partnership for Public Service for being the most improved 

federal agency subcomponent. 

CIRCULATING 

The key drivers for our circulating segment in FY 2011 were increased demand from the Federal Reserve and the 

continuation of penny and nickel costs exceeding their face values. Circulating shipments recovered to 7.4 billion 

coins in FY 2011. Following peak shipments of over 27 billion coins in FY 2000 (driven by Year 2000 concerns 

and the popularity of the 50 State Quarters® Program), our annual shipments had declined to 10 billion in FY 2008. 

In FY 2009, the economic crisis triggered a massive flow-back of coins from circulation to the depository institutions 

and ultimately the Federal Reserve Banks (FRB). As a result, the FRB ordered only 5.2 billion new coins from the 

Mint in FY 2009, the lowest level since the 1960s. Demand for coins increased in FY 2011 to 7.4 billion coins, 

representing a 19.3 percent Compound Annual Growth Rate from the FY 2009 low. The teams at Denver and 

Philadelphia, as well as our entire supply chain, effectively worked together to anticipate and meet the increased 

production volume. We are very proud of our manufacturing plants and the outstanding safety and fulfillment 

accomplishments they achieved in FY 2011. 

As they have for the past five years, the costs to manufacture and distribute both the penny and the nickel exceeded 

their face values in FY 2011. High commodity prices for base metals, along with lower production volumes, were 

the principle reasons for these higher per-unit costs. Also in FY 2011, we improved an accounting practice and 

began allocating some sales, general, and administrative (SG&A) costs to the penny and the nickel where none had 

been charged previously. Because of these factors, the FY 2011 year-end cost of a penny was $0.0241 per coin. 

Likewise, the year-end cost of the nickel was $0.1118 per coin. Positive seigniorage from our other denominations 

offset the negative seigniorage from the penny and nickel. 

PRECIOUS METAL BULLION 

The Mint is proud to offer 22- and 24-karat gold, 99.9 percent silver, and 99.95 percent platinum bullion coins. FY 

2011 was a record year in both unit volume and total ounces sold. Gold and silver prices reached all-time highs in 

2011, as investors evidently chose bullion assets in favor of other investment categories. The Mint is the world’s 

largest producer of precious metal bullion coins and our presses produced a record 43.5 million bullion pieces 

in FY 2011, representing over 45.2 million ounces. 

While gold gets most of the attention because of its higher price and the corresponding dollar magnitude, it was 

actually silver that dominated the scene in 2011 on a unit-volume basis. This sustained high volume was one 

of the considerations that led us to our decision in February to resume minting one-ounce silver bullion coins 

in San Francisco. In addition, Philadelphia brought the new five-ounce America the Beautiful Silver Bullion CoinsTM 

to market in FY 2011. 

Although we did not produce platinum bullion coins in 2011, we are evaluating, in conjunction with our authorized 

purchaser distribution channel, the optimum way to bring back American Eagle Platinum Bullion Coins in 2012. 

A legislatively required market study examining the financial viability of a palladium bullion coin will soon begin. 

We look forward to presenting the results of that study to the Secretary of the Treasury and Congress. 

2
 
NUMISMATIC COLLECTOR COINS AND MEDALS 

FY 2011 was a record year for Mint numismatic revenue. Total FY 2011 numismatic sales revenue increased 74.7 

percent, from $413.1 million in FY 2010 to $721.7 million in FY 2011. We were very pleased to bring back the 

American Eagle Silver Proof Coin Program, which saw both the 2010 and 2011 coins launched for sale during 

FY 2011. Contributing $83.6 million in incremental revenues over the prior year, we look forward to additional 

growth in this popular program in FY 2012 through our special five-coin American Eagle 25th Anniversary 

Silver Coin Set. 

Our new products for 2011 also included the unique America the Beautiful Five Ounce Silver Uncirculated CoinTM, 

featuring beautiful designs of our country’s national parks and historic sites. We also reprised the West Point mint 

mark for the American Eagle Silver Uncirculated Coin in 2011 and look forward to expanding this offering to 

include the San Francisco mint mark in 2012. 

THE ROAD AHEAD 

Our efforts in the year ahead will continue to focus on our customers. Our everyday mission is to produce 

cost-effective circulating, bullion, and numismatic coins to meet the needs of our customers and the nation. The 

Mint team executes this bread-and-butter mission very well and will continue to do so throughout 2012 and beyond. 

While staying focused on this core mission, we also need to understand the broader trends, dynamics, and realities 

of today’s economic environment—more so now than perhaps at any other time in recent Mint history. Specifically, 

we need to focus on the metals composition and purchasing power of our circulating coins. 

Every few generations the nation adjusts the metals content (and occasionally the actual denominations, physical 

size, and weight) of its circulating coins. The last major overhaul of United States coinage occurred 46 years ago in 

1965. In December 2010, in response to the increased metals and production costs of the past five years, Congress 

passed the “Coin Modernization, Oversight, and Continuity Act of 2010,” authorizing the Mint to conduct advanced 

research and development of new metals formulations for our circulating coins. The law requires the Mint to issue 

its first report with any findings and recommendations to Congress by December 2012. As was done in 1965, we 

have selected a contractor to conduct the research and development. The contractor will prepare a report of its 

findings that will serve as the basis for our recommendations to Congress. We are clearly focused on delivering to 

Congress a thorough, well-researched report that provides a prudent framework for future legislation to modernize 

our nation’s circulating coins. 

Finally, on a personal note, I was humbled and honored to be appointed Deputy Director of the Mint by the Treasurer 

of the United States, Rosie Rios, in January 2011. The opportunity to lead the United States Mint team during this 

exciting time is the highlight of my professional career. Before my appointment as Deputy Director, I led the Mint’s 

Manufacturing function for two years. In my time at the Mint, I have met and come to know many of our employees. 

Our people—our team—are the real heart and soul of the Mint. Whether it is the production associate on the shop 

floor in one of our facilities, the Mint Police officer keeping our nation’s gold safe at Fort Knox, or one of our 

support staff in Washington, it is the hard work of each person on the team that together drives the outstanding 

results the Mint delivers each and every day. Each one of our employees has my personal thanks for a job well done 

in 2011. It is because of them, and their commitment to service, that I am confident that we are well prepared for the 

opportunities and challenges that lie ahead. 

Sincerely, 

Richard A. Peterson, Deputy Director
	

3
 
Front row, left to right : Al Runnels, Acting Chief of Staff; Daniel Riordan, Associate Director of Workforce 

Solutions; Goutam Kundu, Chief Information Officer; Patricia M. Greiner, Chief Financial Officer; 

Tom Jurkowsky, Director of Public Affairs; Andy Fishburn, Director of Legislative Affairs; 

Dick Peterson, Deputy Director 

Second row, left to right : Eric Anderson, Executive Secretary; Larry Eckerman, San Francisco Plant Manager; 

Dennis O’Connor, Chief of Protection; Ellen McCullom, West Point Plant Manager; B. B. Craig, Associate 

Director of Sales and Marketing; Daniel P. Shaver, Chief Counsel; David Croft, Denver Plant Manager; 

J. Marc Landry, Acting Associate Director of Manufacturing and Philadelphia Plant Manager 

4

OUR MISSION: To manufacture and distribute circulating coins, precious metal and collectible coins, and national 

medals to meet the needs of the United States. 

OUR VISION: To become recognized as the finest mint organization in the world through excellence in our people, 

products, customer service, and workplace. 

Established in 1792, the Mint is the world’s largest coin manufacturer. Since Fiscal Year (FY) 1996, the Mint 

has operated under the United States Mint’s Public Enterprise Fund (PEF). As authorized by Public Law 104-52 

(codified at 31 U.S.C. § 5136), the PEF enables the Mint to operate without an appropriation. We generate revenue 

through the sale of circulating coins to the Federal Reserve Banks (FRB), numismatic products to the public and 

bullion coins to authorized purchasers. Money in excess of amounts required by the PEF is transferred to the United 

States Treasury General Fund. 

The Mint operates six facilities and employs approximately 1,800 employees across the United States. Each facility 

performs unique functions critical to our overall operations. Manufacturing facilities in Philadelphia and Denver 

produce coins of all denominations for circulation. Both facilities also produce dies for striking coins. All sculpting 

and engraving of circulating, bullion, and numismatic coin and medal designs is performed in Philadelphia. 

Production of numismatic and bullion products is primarily performed at facilities in San Francisco and West Point. 

All four production facilities produce commemorative coins as authorized by federal laws. The United States 

Bullion Depository at Fort Knox stores and safeguards United States gold bullion reserves. Administrative and 

oversight functions are performed at our Headquarters in Washington, D.C. 

ORGANIZATIONAL PROFILE
 

 

 

 

 

 

 

TABLE OF CONTENTS
 

The United States Mint at a Glance 6
	

Management Discussion and Analysis 9
	

Message from the Acting Chief Financial Officer 25
	

Independent Auditors’ Report 26
	

Financial Statements 28
	

Notes to Financial Statements 32
	

Required Supplementary Information 48
	

Independent Auditors’ Report on Internal Controls 49
	

Exhibit I – Significant Deficiencies 51
	

Exhibit II – Management Response 52
	

Independent Auditors’ Report on Compliance and Other Matters 53
	

Appendix I: FY 2011 Coin and Medal Products 55
	

5
 
4,970.0 

3,886.7 

2,912.4 

2,800.5 

2,635.4 

2007 2008 2009 2010 2011 

3,471.4 

356.1 

948.8 

1,694.8 

2,855.4 

2007 2008 2009 2010 2011 

721.7 

551.5 557.2

440.0 

413.1 

2007 2008 2009 2010 2011 

1,085.6 

806.4

527.8 501.6

405.8 

2007 2008 2009 2010 2011 

THE UNITED STATES MINT AT A GLANCE
 

UNITED STATES MINT Revenue (dollars in millions) Revenue by Line of Business 

(percent of total) The Mint is the world’s largest coin manufacturer. 

Our men and women manufacture and distribute 

circulating coins, precious metals, collectible 

coins, and national medals to meet the needs of 

the United States. Our vision is to be recognized 

as the finest mint in the world through excellence 

in our people, products, customer service, 

and workplace. 

Numismatic

14.5% Bullion

69.9%

Circulating 

15.6%

Revenue by Denomination 

Revenue (dollars in millions) (dollars in millions) CIRCULATING COINAGE One-Cent 

42.9 $1 Coin

467.0 Five-Cent

45.7 

Dime

140.3 

Quarter-Dollar 

81.0

1,727.8 

1,294.5 

777.6 776.9 

618.2 

2007 2008 2009 2010 2011 

The Mint is the sole manufacturer of legal tender 

coinage in the United States. The Mint’s highest 

priority is to efficiently and effectively mint 

and issue circulating coinage. 

BULLION COINS 

The Mint is the world’s largest producer of gold 

and silver bullion coins. The bullion program 

provides consumers a simple and tangible means 

to acquire precious metal coins. Investors purchase 

bullion coins for the intrinsic metal value and 

the United States Government’s guarantee of 

each coin’s metal weight, content, and purity. 

Revenue (dollars in millions) Revenue by Program 

(dollars in millions) 

American
 

Eagle Silver
 

1,464.0
 

America the
 

Beautiful Silver
 

110.0
 

American 

Buffalo Gold 

207.9 

American 

Eagle Gold 

1,689.5 

American Eagle 

370.8

Numismatic 

Sale of Circulating Coins

14.5 

Commemorative 

43.2

American Buffalo 

61.8 

Recurring 

231.4

Revenue by Program 

Revenue (dollars in millions) (dollars in millions)

NUMISMATIC PRODUCTS 

The Mint prepares and distributes numismatic 

products for collectors and those who desire 

high-quality versions of coinage. We make 

numismatic products accessible, available, 

and affordable to customers. 

Seigniorage and Net Income by Line of Business

(dollars in millions, before protection cost) Seigniorage and Net Income 

SEIGNIORAGE AND NET INCOME (dollars in millions, before protection cost)
 

Seigniorage is the difference between the face 

value and cost of producing coinage. The Mint 

transfers seigniorage to the Treasury General 

Fund to help finance national debt. Net income 

from bullion and numismatic operations can 

also fund federal programs. 

Numismatic
 

113.2

Circulating

348.8

Bullion 

65.8

6
 
750.0 

475.0 388.0 

51.0 

2007 2008 2009 2010 2011 

825.0 

4,442.2 

3,480.9 

2,410.8 

1,994.1 

1,549.8 

2007 2008 2009 2010 2011 

Gross Cost (dollars in millions) 2011 PERFORMANCE 

Revenue and net income improved across all three business lines in FY 2011. Total 

revenue approached $5.0 billion, increasing 27.9 percent from last year. Sales demands 

and metal market prices drove demand for bullion revenue to a new record high. Growing 

demand for coinage increased circulating revenue from prior years. While aggregate 

sales, general, and administrative (SG&A) expenses declined 5.9 percent from last year, 

higher cost of goods sold (COGS) increased gross costs 27.6 percent to $4.4 billion. 

Total seigniorage and net income, before Protection expense, climbed 30.1 percent 

to $527.8 million. 

Shipments 

(millions of coins) 

five-cent 

914 

one-cent 

4,289 

quarter-dollar 

323 

dime 

1,403 

$1 coin 

467 

Circulating coin shipments increased 37.0 percent to 7,396 million coins in FY 2011. 

Shipments of all coin denominations increased from FY 2011 with nickels and dimes 

experiencing the strongest annual growth. Circulating revenue increased 25.7 percent 

to $776.9 million. Seigniorage increased 16.0 percent to $348.8 million, but rising metal 

expenses and higher volumes of pennies and nickels reduced seigniorage per dollar 

issued to $0.45 from $0.49 last year. 

Sales 

(millions of ounces) 

American 

Eagle Gold

1.1 

American 

Eagle Silver 

41.3 American 

Buffalo Gold 

0.1 

America the 

Beautiful Silver 

2.7 

Demand for bullion coins reached a new high in FY 2011, surpassing the unprecedented 

demand of FY 2010. The Mint sold 45.2 million ounces of gold and silver bullion coins 

in FY 2011, up approximately 9.4 million ounces (26.2 percent) from last year. The bureau 

sold a record volume of coins at higher prices because of increased market value for gold 

and silver. Total bullion revenue increased 21.6 percent to nearly $3.5 billion in FY 2011. 

Bullion net income increased 19.2 percent to $65.8 million. 

Sales 

(thousands of units sold) 

American Eagle 1,938 

Recurring 

4,081 

American Buffalo 

36 

Numismatic Sales 

of Circulating Coins 

611 

Commemorative 

645 

Numismatic sales increased 11.6 percent to approximately 7.3 million units in FY 2011. 

The Mint was able to offer popular gold and silver coin products previously unavailable 

because blanks were dedicated to the bullion program. This, as well as release of new 

products, drove numismatic sales revenue up 74.7 percent to $721.7 million. Numismatic 

net income and seigniorage increased 127.3 percent to $113.2 million. 

Transfer to the Treasury General Fund 

(dollars in millions) TRANSFER TO THE GENERAL FUND 

In FY 2011, the Mint made an on-budget transfer of $51.0 million to the Treasury General 

Fund. This represented earnings from the prior fiscal year for our numismatic and bullion 

programs. There was not an off-budget transfer to the General Fund this fiscal year. 

Instead, the Mint held cash in reserve for future potential impacts to our circulating 

program from continued penny and nickel losses and a decline in demand for the $1 coin. 

7
 
2011 AMERICA THE BEAUTIFUL QUARTERS® PROGRAM 

In 2010, the United States Mint began issuing 56 quarter-dollar coins featuring designs 

of national parks or historic sites. During FY 2011, we released coins honoring 

Mount Hood National Forest, Gettysburg National Military Park, Glacier National Park, 

Olympic National Park and Vicksburg National Military Park. 

8 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EFFECTIVELY MET ALL CIRCULATING DEMAND
 

As America’s sole manufacturer of legal tender coinage, the efficient and effective production and distribution 

of coinage is the Mint’s highest priority. 

We mint and issue circulating coins to the FRB in quantities they determine necessary to replenish inventory and 

fulfill the demand of commercial banks and other financial institutions. These depository institutions then distribute 

coins to meet the demand of retailers and the public. The Mint recognizes revenue from the sale of circulating 

coins at face value when they are shipped to the FRB. 

CIRCULATING RESULTS 

Circulating coin demand increased in FY 2011 from 

prior year lows. Total circulating coins shipped to the 

FRB increased 37.0 percent to 7,396 million pieces in 

FY 2011 from 5,399 million pieces in FY 2010. 

Shipments of all coin denominations increased. Nickel 

and dime shipments experienced the greatest annual 

growth, increasing 154.6 percent and 58.2 percent, 

respectively, from FY 2010. 

Total Circulating Coin Production (coins in millions) 

30,000 

25,000

20,000 

15,000 

10,000

5,000 The total dollar value of circulating shipments rose 25.7 

percent to $776.9 in FY 2011 from $618.2 million in 

FY 2010. Seigniorage increased 16.0 percent to $348.8 

million from $300.8 million last year. Larger production 

volumes and higher raw material expenses increased 

0 

the gross cost from circulating operations. Circulating gross costs rose 34.9 percent to $428.1 million in FY 2011 

from $317.4 million in FY 2010. Increased metal expenses drove COGS up 52.5 percent to $364.7 million from 

$239.2 million last year. Market prices for copper, nickel, and zinc climbed through FY 2011, increasing per unit 

metal costs for all circulating denominations. Average market prices for copper and nickel increased 29.3 percent 

and 19.2 percent, respectively, from FY 2010 to FY 2011. The average daily spot for zinc rose 7.6 percent over 

the same time period. SG&A declined 18.9 percent to $63.4 million in FY 2011 from $78.2 million in FY 2010, 

reflecting reductions in payroll, rent, and contract service expenses. In addition, a smaller portion of total general 

and administrative expenses was allocated to circulating operations under a new allocation approach. The increase 

in COGS relative to the total value of shipments decreased seigniorage per dollar issued to $0.45 in FY 2011 from 

$0.49 in FY 2010. 

CIRCULATING (dollars in millions except seigniorage per $1 issued) % Change 

1971 1981 1991 2001 2011 

 2011 2010 2009 2008 2007 2010 to 2011

Value of Shipments $ 776.9 $ 618.2 $ 777.6 $ 1,294.5 $ 1,727.8 25.7%

Gross Cost $ 428.1 $ 317.4 $ 349.8 $ 588.3 $ 722.6 34.9%

 Cost of Goods Sold $ 364.7 $ 239.2 $ 251.7 $ 491.3 $ 629.1 52.5%

 Sales, General & Administrative $ 63.4 $ 78.2 $ 98.1 $ 97.0 $ 93.5 (18.9%)

Seigniorage $ 348.8 $ 300.8 $ 427.8 $ 706.2 $ 1,005.2 16.0% 

Seigniorage per $1 Issued $ 0.45 $ 0.49 $ 0.55 $ 0.55 $ 0.58 

9
 
Price per metric tonne 

Renee Moton, budget branch chief, ensures that 

departmental and agency budgets are formulated 

correctly and that funds are spent wisely. 

Base Metal Daily Official Spot Price (prices per metric tonne in dollars) 

Copper Nickel Zinc

5,000 60,000

50,000

12,000

10,000 4,000

Price per metric tonne

Price per metric tonne

40,000

30,000

20,000

8,000

6,000

3,000

2,000

4,000 1,000 10,000

2,000 0 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 0 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 

The unit cost for both penny and nickel denominations remained above face value for the sixth consecutive fi scal 

year. Because of increased unit cost and higher demand, penny and nickel coins were produced at a loss of $116.7 

million, nearly three times the FY 2010 loss of $42.6 million.
	

COST ALLOCATION APPROACH 

In FY 2011, the Mint implemented a new method for allocating SG&A expenses. Previously, SG&A cost was
	

allocated to products based on gross margin. Little or no allocated SG&A expense was applied to the penny and 

nickel because they generated negligible or negative gross margins. The Mint studied industry best practices and
	

developed a new SG&A cost allocation approach which conforms to accounting standards and leading commercial

and public sector best practices. The new approach allocates SG&A expenses based on the costs to manufacture, 

market, and distribute each product.
	

ALTERNATIVE METAL RESEARCH AND DEVELOPMENT 

Metal expenses continue to make up the largest portion of circulating production cost. In December 2010, President 

Obama signed into law the Coin Modernization, Oversite, and Continuity Act of 2010 (Public Law 111-302) to
	

provide the Secretary of the Treasury research and development authority for alternative metallic materials for
	

circulating coins. To provide technical expertise and ensure an independent assessment, the Mint entered into a
	

contract with an external fi rm to preform research and development in advance of the Mint’s fi rst report.
	

CIRCULATING PRODUCTION OPERATIONS 

In FY 2011, we made changes to the minting process at both Philadelphia and Denver facilities. Changes to die and 

blank processing improved the quality of coins and made dies last longer. The circulating Mint Quality Index, our 

measure of coin appearance against quality criteria, increased from 95.0 percent in FY 2010 to 98.0 percent in FY

2011. Average die life for nickels, dimes and quarters increased 70.8 percent in FY 2011, reducing the raw material 

and production costs we incur to manufacture dies for circulating coins.
	

The Philadelphia and Denver facilities also implemented a quick die-change process to reduce the amount of time
	

machines sit idle. Longer die life and less downtime mean our equipment runs more effectively. In FY 2011,
	

Philadelphia and Denver increased overall equipment effectiveness by 9.1 percent and 4.6 percent, respectively, 

from last year. This key industry indicator shows how effectively manufacturing equipment operates compared to 

expected output speed and yield.
	

10
 
2010 One-Cent Five-Cent Dime Quarter-Dollar Half-Dollar $1 Mutilated Total

 & Other

Coins Shipments 3,487 359 887 252 – 414 – 5,399 

Value of Shipments $ 34.9 $ 17.9 $ 88.7 $ 63.2 $ – $ 413.5 $ – $ 618.2 

Gross Cost $ 62.3 $ 33.1 $ 50.6 $ 32.2 $ 0.1 $ 130.7 $ 8.4 $ 317.4 

 Cost of Goods Sold $ 62.3 $ 33.1 $ 40.8 $ 24.6 $ 0.1 $ 69.9 $ 8.4 $ 239.2 

 Sales, General & Administrative $ – $ – $ 9.8 $ 7.6 $ – $ 60.8 $ – $ 78.2 

Seigniorage $ (27.4) $ (15.2) $ 38.1 $ 31.0 $ (0.1) $ 282.8 $ (8.4) $ 300.8 

Seigniorage per $1 Issued $ (0.79) $ (0.85) $ 0.43 $ 0.49 $ – $ 0.68 $ – $ 0.49

2009 One-Cent Five-Cent Dime Quarter-Dollar Half-Dollar $1 Mutilated Total

 & Other

Coins Shipments 3,218 207 358 965 – 459 – 5,207 

Value of Shipments $ 32.2 $ 10.3 $ 35.7 $ 241.3 $ – $ 458.1 $ – $ 777.6 

Gross Cost $ 52.0 $ 12.5 $ 20.2 $ 109.1 $ (0.1) $ 139.4 $ 16.7 $ 349.8 

 Cost of Goods Sold $ 52.0 $ 12.2 $ 16.6 $ 80.3 $ (0.2) $ 74.1 $ 16.7 $ 251.7 

 Sales, General & Administrative $ – $ 0.3 $ 3.6 $ 28.8 $ 0.1 $ 65.3 $ – $ 98.1 

Seigniorage $ (19.8) $ (2.2) $ 15.5 $ 132.2 $ 0.1 $ 318.7 $ (16.7) $ 427.8 

Seigniorage per $1 Issued $ (0.61) $ (0.21) $ 0.43 $ 0.55 $ – $ 0.70 $ – $ 0.55

2011 One-Cent Five-Cent Dime Quarter-Dollar Half-Dollar $1 Mutilated Total

 & Other

Coins Shipments 4,289 914 1,403 323 – 467 – 7,396 

Value of Shipments $ 42.9 $ 45.7 $ 140.3 $ 81.0 $ – $ 467.0 $ – $ 776.9 

Gross Cost $ 103.1 $ 102.2 $ 79.3 $ 36.0 $ – $ 84.2 $ 23.3 $ 428.1 

 Cost of Goods Sold $ 85.4 $ 86.1 $ 67.1 $ 30.3 $ – $ 72.5 $ 23.3 $ 364.7 

 Sales, General & Administrative $ 17.7 $ 16.1 $ 12.2 $ 5.7 $ – $ 11.7 $ – $ 63.4 

Seigniorage $ (60.2) $ (56.5) $ 61.0 $ 45.0 $ – $ 382.8 $ (23.3) $ 348.8 

Seigniorage per $1 Issued $ (1.40) $ (1.24) $ 0.43 $ 0.56 $ – $ 0.82 $ – $ 0.45

2010 One-Cent Five-Cent Dime Quarter-Dollar Half-Dollar $1 

Cost of Goods Sold $ 0.0176 $ 0.0916 $ 0.0454 $ 0.0956 $ – $ 0.1659 

Sales, General & Administrative $ – $ – $ 0.0110 $ 0.0302 $ – $ 0.1469 

Distribution to FRB $ 0.0003 $ 0.0006 $ 0.0005 $ 0.0020 $ – $ 0.0029 

Total Unit Cost $ 0.0179 $ 0.0922 $ 0.0569 $ 0.1278 $ – $ 0.3157 

2009 One-Cent Five-Cent Dime Quarter-Dollar Half-Dollar $1 

Cost of Goods Sold $ 0.0159 $ 0.0579 $ 0.0456 $ 0.0816 $ – $ 0.1601 

Sales, General & Administrative $ – $ 0.0014 $ 0.0101 $ 0.0298 $ – $ 0.1424 

Distribution to FRB $ 0.0003 $ 0.0010 $ 0.0008 $ 0.0017 $ – $ 0.0017 

Total Unit Cost $ 0.0162 $ 0.0603 $ 0.0565 $ 0.1131 $ – $ 0.3042 

2011 One-Cent Five-Cent Dime Quarter-Dollar Half-Dollar $1 

Cost of Goods Sold $ 0.0197 $ 0.0938 $ 0.0474 $ 0.0923 $ – $ 0.1531 

Sales, General & Administrative $ 0.0041 $ 0.0176 $ 0.0087 $ 0.0176 $ – $ 0.0251 

Distribution to FRB $ 0.0003 $ 0.0004 $ 0.0004 $ 0.0015 $ – $ 0.0021 

Total Unit Cost $ 0.0241 $ 0.1118 $ 0.0565 $ 0.1114 $ – $ 0.1803 

SHIPMENTS, COSTS AND SEIGNIORAGE BY DENOMINATION 

(coins and dollars in millions except seigniorage per $1 issued) 

UNIT COST OF PRODUCING AND DISTRIBUTING COINS BY DENOMINATION 

Note: FY 2009 $1 Cost of Goods Sold unit cost revised to $0.1601 from $0.1599 in FY 2009 Annual Report to correct a rounding error. 

11 
The United States Mint introduced the American Eagle Silver Coin Program in 1986. 

The American Eagle Silver Coin’s obverse design features Adolph A. Weinman’s full-length 

figure of Liberty in full stride, enveloped in folds of the flag, with her right hand extended 

and branches of laurel and oak in her left. The reverse design, by former United States Mint 

Sculptor-Engraver John Mercanti, features the heraldic eagle with shield, an olive branch 

in the right talon and arrows in the left. Now in its 25th year of issue, the American Eagle Silver 

Coin remains one of the United States Mint’s most popular products. 

12 

2011 AMERICAN EA 2011 AMERICAN EAGLE SIL GLE SILVER COIN
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EFFECTIVELY MANAGED BULLION PROGRAM
 

Our bullion program provides the public a simple and tangible means to acquire precious metal coins from authorized 

purchasers as part of an investment portfolio. Investors purchase bullion coins not only for their intrinsic metal 

value, but also because the United States guarantees each coin’s metal weight, content, and purity. 

We mint and issue gold, silver, and platinum bullion coins to authorized purchasers through American Eagle, 

American Buffalo and America the Beautiful Silver Bullion CoinTM Programs. The Mint sells the coins to the 

authorized purchasers at the same market price paid for the metal plus a premium to cover bullion program operating 

costs. Authorized purchasers agree to maintain an open, two-way market for these coins, assuring their liquidity. 

This allows the public to purchase and sell coins at the prevailing market price, adjusting for any premium the 

authorized purchaser applies. 

BULLION RESULTS Total Bullion Sales (ounces sold in millions) 

Demand for bullion coins reached a new high in FY 2011, 

surpassing the unprecedented demand of FY 2010. The weak 

dollar and global economic uncertainty fueled investor demand 

for gold and silver. 

The Mint sold 45.2 million ounces of gold and silver bullion coins 

in FY 2011, up approximately 9.4 million ounces (26.2 percent) 

from the previous record total sales of 35.8 million in FY 2010. 

We sold this record volume to authorized purchasers at higher 

metal market prices. The average spot price of gold and silver 

increased 28.8 percent and 87.9 percent, respectively. Accordingly, 

total bullion revenue reached a record high of $3,471.4 million in 

FY 2011, up $616.0 million (21.6 percent) from $2,855.4 million 

in FY 2010. 

50 

45 

40 

35 

30 

25 

20 

15 

10 

5 

0 

8.3 

35.8 

27.6 

18.4 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

45.2 

Unprecedented sales of silver bullion products drove record 

revenue in FY 2011. Revenue from American Eagle Silver 

Bullion Coin sales more than doubled, climbing 121.9 percent 

to $1,464.0 million. New product sales of America the Beautiful 

Quarters Silver Bullion CoinsTM also added to bullion revenue growth. Sales of the 2010 and 2011 five-ounce silver 

bullion coins generated $110.0 million in revenue in FY 2011. The Mint sold 22.7 percent fewer ounces of American 

Eagle Gold Bullion Coins at higher spot prices, resulting in revenue declining slightly (1.2 percent) to $1,689.5 

million in FY 2011. American Buffalo Gold Bullion Coin sales and revenue fell substantially from last year, primarily 

because of different product release schedules. 

BULLION (dollars in millions) % Change 

 2011 2010 2009 2008 2007 2010 to 2011

Sales Revenue $ 3,471.4 $ 2,855.4 $ 1,694.8 $ 948.8 $ 356.1 21.6%

Gross Cost $ 3,405.6 $ 2,800.2 $ 1,662.1 $ 931.0 $ 351.6 21.6%

 Cost of Goods Sold $ 3,378.8 $ 2,778.4 $ 1,650.0 $ 922.6 $ 350.0 21.6%

 Sales, General & Administrative $ 26.8 $ 21.8 $ 12.1 $ 8.4 $ 1.6 22.9%

Net Income $ 65.8 $ 55.2 $ 32.7 $ 17.8 $ 4.5 19.2% 

Bullion Net Margin 1.9% 1.9% 1.9% 1.9% 1.3% 

13
 
500

Gold Silver Platinum 

2,000 50 2,500

40 2,000

1,500 30

1,500

20 1,000

10 1,000

500 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 0 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11

Christopher Hyde operates a turning lathe to machine 

the outside diameter of a dollar coin reverse die. He can 

watch the machining process on-screen. 

Bullion net income increased to $65.8 million in FY 2011, up 19.2 percent from $55.2 million in FY 2010. The bullion 

net margin remained level at 1.9 percent as gross costs increased proportionally with revenue. Bullion COGS, 

primarily refl ecting the metal market prices of products sold, increased 21.6 percent to $3,378.8 million in FY 2011 

from $2,778.4 million last year. Bullion SG&A cost increased 22.9 percent to $26.8 million because a larger portion 

of total SG&A expenses was allocated to bullion operations under the new allocation approach. Allocation based on 

level of effort resulted in more SG&A expense going to silver bullion programs and less to gold bullion programs. 

This caused FY 2011 American Eagle Gold Bullion net income to increase 25.2 percent to $44.2 million on slightly 

lower revenue, while American Eagle Silver Bullion net income remained stable despite increased revenue. 

Precious Metal Daily Spot Price (prices per troy ounce in dollars) 

BULLION PRODUCTION OPERATIONS 

We sold an unprecedented volume of 41.3 million American Eagle Silver Bullion Coins in FY 2011. The West Point 

Mint continued to improve its productivity and effi ciency, which signifi cantly expanded American Eagle Silver 

Bullion production over the past few years. The facility also transitioned from a chrome-plated sand-blasted die to 

a wire-brushed non-chrome plated die in FY 2011. This new fi nish was easier to clean and ensured that dies last 

signifi cantly longer, which expanded the volume of bullion coins produced without increasing costs. 

In May 2011, we began fulfi lling orders for American Eagle silver bullion with coins minted at the San Francisco 

Mint. The West Point Mint had been the sole producer of these coins for several years. Fulfi lling unprecedented 

demand for American Eagle Silver Bullion Coins, as well as producing other mandated bullion and numismatic 

products, stressed our capacity at West Point. Offering the authorized purchasers a pick-up point on the West Coast 

provided them greater fl exibility and convenience. 

PALLADIUM BULLION COINS 

On Dec. 14, 2010, President Obama signed the American Eagle Palladium Bullion Coin Act of 2010 into Public 

Law 111-303. Subject to the results of an independent market study, this law provides for the Mint to mint and issue 

a $25 coin weighing one troy ounce and containing .9995 fi ne palladium. The legislation requires that a third party 

conduct a study analyzing whether there is adequate demand for palladium bullion coins, and if so, whether the coins 

could be minted at no net cost to taxpayers. The Mint contracted with an independent research fi rm to conduct the 

study in FY 2011. Results of the study will be submitted to the Secretary of the Treasury and Congress for review 

in FY 2012. 

14
 
2010 American American American American Total 

Eagle Gold Eagle Silver Eagle Platinum Buffalo Gold 

Sales Revenue $ 1,710.8 $ 659.9 $ – $ 484.7 $ 2,855.4 

Gross Cost $ 1,675.5 $ 646.4 $ – $ 478.3 $ 2,800.2 

 Cost of Goods Sold $ 1,663.5 $ 641.7 $ – $ 473.2 $ 2,778.4 

 Sales, General & Administrative $ 12.0 $ 4.7 $ – $ 5.1 $ 21.8 

Net Income $ 35.3 $ 13.5 $ – $ 6.4 $ 55.2

Bullion Net Margin 2.1% 2.0% – 1.3% 1.9% 

2009 American American American American Total 

Eagle Gold Eagle Silver Eagle Platinum Buffalo Gold 

Sales Revenue $ 1,278.2 $ 372.0 $ 23.7 $ 20.9 $ 1,694.8 

Gross Cost $ 1,252.7 $ 365.9 $ 22.7 $ 20.8 $ 1,662.1 

 Cost of Goods Sold $ 1,245.0 $ 361.9 $ 22.4 $ 20.7 $ 1,650.0 

 Sales, General & Administrative $ 7.7 $ 4.0 $ 0.3 $ 0.1 $ 12.1 

Net Income $ 25.5 $ 6.1 $ 1.0 $ 0.1 $ 32.7

Bullion Net Margin 2.0% 1.6% 4.2% 0.5% 1.9% 

2011 American American American American America the Total 

Eagle Gold Eagle Silver Eagle Platinum Buffalo Gold Beautiful Silver 

Sales Revenue $ 1,689.5 $ 1,464.0 $ – $ 207.9 $ 110.0 $ 3,471.4 

Gross Cost $ 1,645.3 $ 1,450.4 $ – $ 202.9 $ 107.0 $ 3,405.6 

 Cost of Goods Sold $ 1,642.3 $ 1,428.0 $ – $ 202.6 $ 105.9 $ 3,378.8 

 Sales, General & Administrative $ 3.0 $ 22.4 $ – $ 0.3 $ 1.1 $ 26.8 

Net Income $ 44.2 $ 13.6 $ – $ 5.0 $ 3.0 $ 65.8

Bullion Net Margin 2.6% 0.9% 2.4% 2.7% 1.9% 

BULLION REVENUE, COST AND NET INCOME BY PROGRAM 

(dollars in millions) 

Note: The Mint suspended production of American Eagle Platinum Bullion Coins to divert planchet supply and production capacity to 

mandatory programs in calendar year 2009. All American Eagle Platinum Bullion revenue recorded in FY 2009 resulted from the sale 

of calendar year 2008 coin inventory in the first quarter. 

15
 
16 

2011 MEDAL OF HONOR COMMEMORATIVE COIN PROGRAM 

This coin commemorates the establishment of the Medal of Honor, the highest award for valor 

in action against an enemy force. The gold coin shows a likeness of the 1861 medal on one side 

and the goddess Minerva on the other. The silver coin depicts the current Army, Navy 

and Air Force Medals of Honor on one side and an infantry soldier carrying a wounded soldier 

on the obverse. Surcharge proceeds from this coin are authorized to be paid to the Congressional 

Medal of Honor Foundation, which funds programs to promote courage, sacrifice, 

selfless service, and patriotism among the American public. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EFFECTIVELY MANAGED NUMISMATIC PROGRAM
 

The Mint’s numismatic program provides high-quality versions of circulating coinage, precious metal coins, 

commemorative coins, and medals for sale to the public. Most of our recurring products—such as United States 

Mint Uncirculated Coins Sets®, United States Mint Proof Sets®, and United States Mint Silver Proof Sets®—are 

required by Federal statute. Other numismatic programs—such as commemorative coins and Congressional Gold 

Medals—are required by individual public laws. A main objective of the numismatic program is to increase our 

customer base and foster sales while controlling costs and keeping prices as low as practicable. 

NUMISMATIC RESULTS 

Retail sales of numismatic products increased 13.1 percent to 

approximately 7.3 million units in FY 2011. The composition of 

sales shifted toward higher priced precious metal products, resulting 

in significant revenue growth. Numismatic revenue increased 74.7 

percent to $721.7 million in FY 2011 from $413.1 million in 

FY 2010. Strong American Eagle Program sales drove revenue 

and sales growth. 

Top Selling Numismatic Products 

(units sold in thousands)

2010 American Eagle Silver

Proof 1 Ounce Coin 

2011 Proof Set 

2011 American Eagle Silver 

Proof 1 Ounce Coin

2010 Proof Set

2011 Silver Proof Set 

850 

841 

751 

498 

461 

Beginning in FY 2009, we were unable to offer numismatic versions 

of American Eagle gold and silver products because blanks were 

diverted to bullion production. The high demand for bullion coins stretched our resources as bullion took precedence 

over numismatic products. We were unable to supply the numismatic products that required the same blanks. Toward 

the end of FY 2010, the Mint was able to qualify additional suppliers, expand gold and silver blank supply and resume 

production of American Eagle numismatic products. These products went on sale in the first quarter of FY 2011. 

In December 2010, the Coinage Modernization, Oversight and Continuity Act of 2010 (Public Law 111-302) granted 

the Mint authority to issue American Eagle Gold and Silver Coins in qualities and quantities the Secretary deems 

appropriate. This amended the bullion program’s statutory priority and allowed the bureau to make the numismatic 

versions of American Eagle coins available for sale, even as bullion demand remained at record highs. Consequently, 

the Mint was able to offer both 2010 and 2011 American Eagle gold and silver products for sale in FY 2011. Sales 

revenue from all American Eagle numismatic sales climbed to $370.8 million. 

NUMISMATIC (dollars in millions) 

% Change 

 2011 2010 2009 2008 2007 2010 to 2011

Sales Revenue $ 721.7 $ 413.1 $ 440.0 $ 557.2 $ 551.5 74.7%

Gross Cost $ 608.5 $ 363.3 $ 398.9 $ 474.8 $ 475.6 67.5%

 Cost of Goods Sold $ 543.8 $ 298.6 $ 329.7 $ 388.1 $ 396.7 82.1%

 Sales, General & Administrative $ 64.7 $ 64.7 $ 69.2 $ 86.7 $ 78.9 0.0%

Net Income & Seigniorage $ 113.2 $ 49.8 $ 41.1 $ 82.4 $ 75.9 127.3%

Numismatic Net Margin 15.7% 12.1% 9.3% 14.8% 13.8% 

Seigniorage Portion $ 9.8 $ 12.0 $ 19.3 $ 22.5 $ 27.1 (18.3%) 

17
 
After completing the turning and polishing process, 

Pamela Allendorf inspects blank dies before they 

become production dies. 

Numismatic sales and revenue also grew because we released the 2011 United States Mint Proof Set®, 2011 United 

States Mint Silver Proof Set®, and 2011 United States Mint Uncirculated Coin Set® in the second quarter, the first 

time these core products were available so early in the calendar year. Our customers often purchase products because 

of the significance of the year in which they were minted. Making products available earlier allowed customers to 

purchase them throughout the calendar year to commemorate anniversaries, birthdays, or other important milestones. 

To achieve the early release, we had to shift every step in the supply chain (from finalizing designs to minting coins 

and packaging final products) forward by nearly six months. We also released new America the Beautiful Quarters® 

numismatic products in FY 2011. Revenue from recurring programs, which include core annual sets and these new 

products, increased 20.6 percent to $231.4 million in FY 2011 from $191.9 million last year. 

Numismatic program net income and seigniorage increased 127.3 percent to $113.2 million in FY 2011 from $49.8 

million in FY 2010. Numismatic net margin increased to 15.7 percent in FY 2011 from 12.1 percent in FY 2010 

primarily because SG&A expenses remained flat and made up a smaller portion of growing revenue. Numismatic 

COGS increased 82.1 percent to $543.8 million in FY 2011 because sales volumes increased and included more 

precious metal products. COGS was consistent relative to revenue, comprising 75.3 percent of revenue in FY 2011 

and 72.3 percent last year. 

COMMEMORATIVE COINS AND MEDALS 

Congress passes legislation authorizing commemorative coins or commemorative medals to honor people, places, 

or events, and the President signs the legislation into law. By law, the price of these coins and medals includes a 

surcharge authorized to be paid to a recipient organization. We launched two commemorative coin programs and one 

commemorative medal program in FY 2011. 

The United States Army Commemorative Coin Program recognizes the establishment of the United States Army. 

More than 30 million Americans have served in the Army since its founding. As of September 30, 2011, the program 

generated $20.5 million in revenue and $2.8 million in eligible surcharges for the recipient organization, the Army 

Historical Foundation. 

The Medal of Honor Commemorative Coin Program recognizes the establishment of the Medal of Honor in 1861. 

The Medal of Honor is the highest award for valor in action against an enemy force that can be bestowed upon an 

individual serving in the U.S. Armed Services. Fewer than 3,500 people have been awarded one of these medals. 

As of September 30, 2011, the program generated $18.5 million in revenue and $2.2 million in eligible surcharges 

for the recipient organization, the Congressional Medal of Honor Foundation. 

The September 11 National Medal is a one-ounce silver medal commemorating the 10th anniversary of the 2001 

terrorist attacks on the United States. Launched in June with initial shipments in September, this two-year program 

generated $9.3 million in revenue and $1.6 million in eligible surcharges as of September 30, 2011. Surcharges are 

authorized to be paid to the National September 11 Memorial & Museum at the World Trade Center. 

IMPROVING CUSTOMER SERVICE 

Because the performance of our numismatic business line depends heavily on our customers’ experience – good or 

bad – the Mint conducts customer satisfaction surveys each quarter. Customers evaluate the Mint’s performance as a 

provider of numismatic products and identify areas for improvement. 

18
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

When customers were surveyed in FY 2011, 91.7 percent rated the Mint favorably, up from 86.1 percent in FY 

2010. The portion of customers satisfied with the Mint as a coin supplier declined over the past few years, primarily 

because we were unable to provide popular American Eagle coins described above. Once we were able to resume 

production and sales of these products in early FY 2011, our customer survey responses greatly improved. We also 

aimed to improve customers’ ordering experience by ensuring that our call center and order fulfillment center met or 

exceeded performance standards for accessibility, call length, and order cycle time. 

The Mint also took a fresh look at how we communicate with customers about our products, whether through 

e-mail, press releases, marketing materials, or the Internet. By studying “best practices” of other mints and making 

the website more robust, the Mint made some small, but important, changes in the way we provide information to 

consumers, such as increasing the frequency of our mailings and using larger print so materials are easier to read. 

NUMISMATIC REVENUE, COST AND NET INCOME OR SEIGNIORAGE BY PROGRAM 

(dollars in millions) 

2011 Recurring Ultra High American American Commemorative Numismatic Sale Total 

Relief Eagle Buffalo of Circulating 

Sales Revenue $ 231.4 $ – $ 370.8 $ 61.8 $ 43.2 $ 14.5 $ 721.7 

Gross Cost $ 219.8 $ – $ 294.8 $ 53.7 $ 35.5 $ 4.7 $ 608.5 

Cost of Goods Sold $ 174.7 $ – $ 281.4 $ 53.1 $ 30.5 $ 4.1 $ 543.8 

Sales, General

 & Administrative $ 45.1 $ – $ 13.4 $ 0.6 $ 5.0 $ 0.6 $ 64.7 

Net Income & Seigniorage $ 11.6 $ – $ 76.0 $ 8.1 $ 7.7 $ 9.8 $ 113.2

Numismatic Net Margin 5.0% – 20.5% 13.1% 17.8% 67.6% 15.7% 

2010 Recurring Ultra High American American Commemorative Numismatic Sale Total 

Relief Eagle Buffalo of Circulating 

Sales Revenue $ 191.9 $ 35.1 $ 32.7 $ 115.6 $ 20.1 $ 17.7 $ 413.1 

Gross Cost $ 170.7 $ 37.1 $ 28.4 $ 103.0 $ 18.4 $ 5.7 $ 363.3 

Cost of Goods Sold $ 131.9 $ 36.2 $ 21.9 $ 90.3 $ 14.9 $ 3.4 $ 298.6 

Sales, General

 & Administrative $ 38.8 $ 0.9 $ 6.5 $ 12.7 $ 3.5 $ 2.3 $ 64.7 

Net Income & Seigniorage $ 21.2 $ (2.0) $ 4.3 $ 12.6 $ 1.7 $ 12.0 $ 49.8

Numismatic Net Margin 11.0% (5.7%) 13.1% 10.9% 8.5% 67.8% 12.1% 

2009 Recurring Ultra High American American Commemorative Numismatic Sale Total 

Relief Eagle Buffalo of Circulating 

Sales Revenue $ 199.8 $ 112.4 $ 55.1 $ 25.7 $ 21.6 $ 25.4 $ 440.0 

Gross Cost $ 189.9 $ 106.0 $ 49.9 $ 24.2 $ 22.8 $ 6.1 $ 398.9 

Cost of Goods Sold $ 152.9 $ 88.9 $ 43.6 $ 21.9 $ 19.1 $ 3.3 $ 329.7 

Sales, General

 & Administrative $ 37.0 $ 17.1 $ 6.3 $ 2.3 $ 3.7 $ 2.8 $ 69.2 

Net Income & Seigniorage $ 9.9 $ 6.4 $ 5.2 $ 1.5 $ (1.2) $ 19.3 $ 41.1

Numismatic Net Margin 5.0% 5.7% 9.4% 5.8% (5.6%) 76.0% 9.3% 

Note: Commemorative coins programs are managed on a calendar year basis. Truncating program results to fiscal year can result 

in negative net income even though no single commemorative coin program generated a loss. 

19 
20 

2011 UNITED STATES ARMY COMMEMORATIVE COIN PROGRAM 

The United States Army was founded in 1775. This commemorative coin program includes 

$5 gold, $1 silver, and half-dollar clad coins, each with a different design recognizing the more than 

30 million Americans who have selflessly served in the Army. The gold coin shows Continental, 

Civil War, modern, World War II and World War I soldiers. The silver coin symbolizes worldwide 

deployment in the 21st century, and the clad coin shows the contributions of service members in peace. 
A SAFE, ENGAGED, PRODUCTIVE AND VALUED WORKFORCE
 

It is our goal to have a safe, engaged and innovative workforce, making the Mint the employer of choice for current 

and future employees. Embracing innovative practices by engaging modern technologies and becoming more 

environmentally sustainable not only benefits our employees, but also benefits the American public. 

SAFETY FIRST 

In our manufacturing facilities, several workplace 

safety programs and policies developed over the 

past three years have kept injury and illness rates at 

the Mint lower than industry standards. Our goal for 

FY 2011 was to have fewer than 3.34 injuries and 

illnesses per 100 full-time workers. In FY 2011, the 

injury and illness rates rose slightly from the year 

before. The recordable case rate increased from 2.29 

in FY 2010 to 2.74 in FY 2011, still well below our 

goal and industry standards of 6.3. 

The number of work-related injuries or illnesses 

resulting in lost workdays was also up, from 11 lost 

Rate of Injury and Illness Cases per 100 Full-Time Workers 

14 

12 

10 

8 

6 

4 

2 

0 

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 

time accidents last year to 15 this year. Because ensuring employee safety is a priority at the Mint, we will continue 

to conduct monthly executive meetings to discuss injury and illness rates, review any incidents and corrective 

actions, and examine ways to reduce risk and prevent future incidents. 

The Mint continued to provide secure workplaces for our employees and the assets entrusted to us. The Mint Police 

improved entrance and exit procedures at all locations. The Mint’s production facilities are housed in historic, aging 

structures, which need constant upkeep to ensure worker and product security. Our annual vulnerability assessments 

help us prioritize system upgrades to comply with federal and state requirements. In FY 2011, we also upgraded the 

electronic security systems across the Mint, improved the road surfaces and fences at Fort Knox, and replaced a 

precious metal detector at West Point. 

POSITIVE CULTURAL CHANGE 

In October, management and the American Federation of Government Employees (AFGE) union representatives 

signed the Seventh National Agreement, which details improvements in the relationship between the AFGE United 

States Mint Council and the Mint. It establishes ground rules for conducting negotiations and addressing issues 

at the local level. The agreement also makes a provision for a National Collaborative Council (NCC), a group 

consisting of management and union representatives located at each facility to develop and implement solutions to 

problems. The NCC meets four times a year and is authorized to establish committees, task forces or other working 

groups to resolve issues. 

FEDERAL EMPLOYEE VIEWPOINT SURVEY 

The United States Office of Personnel Management administers an annual Federal Employee Viewpoint Survey 

(FEVS) to full-time, permanent employees in the Federal Government. The survey measures employees’ perceptions 

regarding how effectively their agency manages its workforce. 

FEVS results are used to develop the Partnership for Public Service’s “Best Places to Work in the Federal 

Government” rankings. For the past few years, the Mint has scored low compared to other agencies, but after 

making a concerted effort to improve employee satisfaction, our rank improved 144 places, from 201 to 57. 

21
 
United States Mint Deputy Director Richard A. Peterson 

and Mint Council President of AFGE Richard Sailas worked 

together to ensure strong employee labor relations. 

In the 2011 FEVS, Mint employee positive response rates improved in 74 out of 84 questions focused on workplace 

experience. Employee satisfaction increased across all areas with considerable improvements in leadership, training 

and development, performance recognition, and work-life balance. The portion of employees reporting they were 

satisfied with their job increased to 73.1 percent in FY 2011 from 64.6 percent in FY 2010. More employees said 

they would recommend the Mint as a good place to work (70.2 percent, up from 58.6 percent in FY 2010), and were 

satisfied with the organization (66.5 percent, up from 49.9 percent in FY 2010). 

WORK/LIFE BALANCE AND TECHNOLOGY 

One of the ways the Mint promotes work-life balance is through its telework policy, which has been in place since 

2000. Teleworking helps ensure the Mint has continuity of operations and improves employees’ ability to balance 

their work and life commitments. In FY 2011, the policy was updated to meet the requirements of the Telework 

Enhancement Act of 2010 (Public Law 111-292). This Act has three objectives: to improve Continuity of Operations, 

to promote management effectiveness and to enhance work-life balance. Because teleworking requires expanded IT 

capability, the Mint improved existing remote workplace capabilities. By the end of the fiscal year, we nearly tripled 

the number of employees with telework agreements. 

THE RIGHT PEOPLE FOR THE RIGHT JOBS 

While technology is an important focus for the future, the work of the Mint could not be accomplished without 

our employees. Throughout the Federal Government, the workforce is aging and beginning to retire in increasing 

numbers. Quickly hiring the right people for the right job is a priority for the Mint and all agencies as they meet 

President Obama’s requirements for hiring reform. Using the Office of Management and Budget’s government-wide 

hiring reform guidelines, the Mint has shortened the amount of time it takes to hire new employees. In FY 2011, 

23 percent of filled positions were hired within 80 calendar days, an increase from 14 percent in FY 2010. 

SUSTAINABILITY EFFORTS 

Implementing our sustainability program has produced positive changes in the workplace. When President Obama 

signed Executive Order 13514 in 2009, all agencies were required to achieve a series of sustainability goals. In the 

past two years, the Mint has made great strides in reducing its environmental impact across all locations. Overall, the 

Mint has reduced its direct greenhouse gas emissions by 20 percent and its potable water consumption by 25 percent 

from the 2008 baseline. The Denver Mint now purchases 100 percent of its electricity from renewable sources; San 

Francisco installed an energy efficient roof; Philadelphia completed a retro-commissioning, bringing its building up 

to current HVAC standards; and Fort Knox now has a high-efficiency natural gas boiler. 

Because of these changes, the Mint has been recognized as a leader in sustainability. In 2010, we received the 

Federal Electronics Challenge Bronze Award, and in 2011, the Washington, D.C., facility obtained ENERGY STAR 

certification. Employees have also taken it upon themselves to cut waste and be more energy efficient, as in San 

Francisco, where employees created a ride-share program and started a recycling program. 

In 2011, the Mint focused on developing and budgeting for a comprehensive sustainability plan, crafting a 

communications and transparency strategy. Committed to the future, the Mint will continue to consider potential 

changes that can positively affect the environment. 

22
 
 

ANALYSIS OF SYSTEMS, CONTROLS AND LEGAL COMPLIANCE 

The Mint is responsible for establishing and maintaining effective internal control over financial reporting and 

has made a conscious effort to meet the internal control requirements of the Federal Manager’s Financial Integrity 

Act (FMFIA), the Federal Financial Management Improvement Act (FFMIA), Office of Management and Budget 

(OMB) Circular A-123, and the Reports Consolidation Act of 2000. The Mint’s programs are operating in 

accordance with the procedures and standards prescribed by the Comptroller General and OMB guidelines. 

The systems of management controls for the Mint are designed to ensure that: 

• programs achieve their intended results and resources are used consistently with the overall mission; 

• programs and resources are free from waste, fraud, and mismanagement and laws and regulations are followed; 

• controls are sufficient to minimize any improper or erroneous payments and performance information is reliable; 

• systems security is in substantial compliance with all relevant requirements; 

• continuity of operations planning in critical areas is sufficient to reduce risk to reasonable levels; and 

• financial management systems are in compliance with federal financial systems standards, (i.e., FMFIA 

Section 4 and FFMIA). 

For all Mint responsibilities, we provide herein unqualified assurance that the above listed management control 

objectives, taken as a whole, were achieved by our organization during FY 2011. Specifically, this assurance is 

provided relative to Sections 2 and 4 of the FMFIA. We further assure that our financial management systems are 

in substantial compliance with the requirements imposed by the FFMIA. In addition, the Mint provides assurance 

that the data reported for all our performance measures is reliable as defined in OMB Circular A-11, Preparation, 

Submission, and Execution of the Budget, Section 232.10. 

Mint management is responsible for establishing and maintaining adequate internal control over financial reporting, 

which includes safeguarding of assets and compliance with laws and regulations. We conducted the required 

Treasury evaluation of the effectiveness of Mint internal control over financial reporting in accordance with OMB 

Circular A-123, Management’s Responsibility for Internal Control. Based on the results of this evaluation, we can 

provide unqualified assurance that internal control over financial reporting as of June 30, 2011, is operating effectively, 

and no material weaknesses were found in the design or operation of the internal control over financial reporting. 

The 2007 Native American $1 Coin Act (Public Law 110-82), as codified at 31 U.S.C. § 5112(r)(5), requires that 

at least 20 percent of all $1 coins minted and issued in any year are Native American $1 Coins. During the 2010 

calendar year, Native American $1 Coins made up 20.1 percent of all $1 coins minted but only 12.5 percent of all 

$1 coins issued because of low demand. As a result, the Mint did not fully comply with Public Law 110-82. The 

balance of 2010 Native American $1 Coins were issued in 2011. 

In addition, the Mint is committed to maintaining effective internal control, as demonstrated by the following actions: 

• Annual audits of the Mint’s financial statements pursuant to the Chief Financial Officers’Act, as amended, including 

a) information revealed in preparing the financial statements; b) auditor’s reports on the financial statements; 

and c) internal controls and compliance with laws and regulations and other materials. 

• Annual performance plans, reviews, and reports pursuant to the GPRA, which include analysis and evaluation 

of performance measures. 

• The development, tracking, and closure of corrective actions identified in the Financial Statement Audit 

and A-123 Assessment. 

• Reviews of management programs and financial systems in conjunction with OMB circular A-123, FFMIA, 

Federal Information Security Management Act, and the Computer Security Act of 1987. 

• Annual assessments, reviews, and reporting complies with the Improper Payments Elimination and Recovery 

Act of 2010. 

The Mint continues to make improvement in maintaining effective internal control over financial reporting and is 

committed to monitoring and improving its internal controls throughout the entire organization. 

23
 
LIMITATIONS OF THE FINANCIAL STATEMENTS
 

The principal financial statements have been prepared to report the financial position and results of operations 

of the Mint, pursuant to the requirements of 31 U.S.C. § 3515(b). The statements have been prepared from the books 

and records of the Mint in accordance with generally accepted accounting principles for federal entities and the 

formats prescribed by the Office of Management and Budget. The statements are in addition to the financial reports 

used to monitor and control budgetary resources, which are prepared from the same books and records. The 

statements should be read with the realization that they are for a component of the United States Government. 

24
 
MESSAGE FROM THE ACTING CHIEF FINANCIAL OFFICER: 

I am pleased to present the Mint’s financial statements in the FY 2011 Annual Report. As an organization, our 

priority is to report accurate financial data while objectively and consistently executing our fiscal responsibilities 

in a timely manner. For FY 2011, our independent auditors rendered an unqualified opinion on our financial 

statements presented herein. The Mint remains committed to accountability and integrity in our financial and 

management responsibilities. 

The annual assessment of internal controls and financial statement audit are key elements to successful stewardship 

of the PEF. In FY 2011, the Mint conducted a comprehensive assessment of the effectiveness of internal controls 

over financial reporting. Based on the results, we can provide unqualified assurance that internal controls over 

financial reporting are operating effectively in accordance with Office of Management and Budget Circular A-123. 

At the close of FY 2011, the PEF is in healthy condition because our program earnings and our stewardship ensures 

sufficient cash reserves for continued financing of circulating operations in an uncertain environment. In FY 2011, 

our numismatic and bullion product lines exceeded our revenue and earnings expectations. Seigniorage generated 

from circulating coins increased from last year largely due to the $1 coin denomination. Minting and issuing the 

penny and nickel denominations resulted in a loss of approximately $116.7 million in FY 2011, the sixth consecutive 

year the penny and nickel were produced at a loss. We expect the FRB demand for these denominations to increase 

in the near future. In addition, the level of $1 coin inventory at the FRB has raised uncertainty about future demand 

for new production of this denomination. In response to these uncertainties to our cash flow from circulating 

operations, we held cash in reserve and limited the transfer to the Treasury General Fund to $51.0 million during this 

fiscal year. Despite these challenges, the Mint’s internal controls and effective stewardship provided a firm footing 

for us to continue fulfilling our mission while working with our stakeholders to improve results. 

The Mint carried out a number of operational improvements in FY 2011. We implemented a new SG&A allocation 

approach, which provides that every product we make carries the appropriate amount of SG&A relative to the effort 

to manufacture, market, and distribute it. We also began using a new budget formulation system, which makes 

planning our expenses more efficient and effective. We achieved three out of five small business procurement goals 

towards a Presidential initiative – allocating 47.7 percent of eligible procurement dollars to small businesses, small 

disadvantaged businesses, and women-owned small businesses, compared to a 27.5 percent collective target. 

We just missed goals for HUBZone and service-disabled veteran-owned small business dollars – allocating 2.0 

percent of eligible dollars versus the 3.0 percent target. We also contributed to another initiative – to reduce the 

Federal Government’s carbon footprint – by obtaining ENERGY STAR certification for our Headquarters building. 

The Mint prepared its financial statements in compliance with accounting standards issued by the Federal Accounting 

Standards Advisory Board (FASAB). The FASAB is designated by the American Institute of Certified Public 

Accountants as the standard-setting body for the financial statements of Federal government entities, with respect 

to establishment of the United States Generally Accepted Accounting Principles. 

The Mint is committed to providing high-quality products and financial results that are complete and understandable 

to our stakeholders, the American public. We hope you find our annual report useful and transparent. We look 

forward to maintaining our 219-year-old tradition of service to the American public and our collectors in FY 2012. 

Sincerely, 

David Motl, Acting Chief Financial Officer 

25
 
Independent Auditors’ Report
	

Inspector General 

United States Department of the Treasury 

Deputy Director 

United States Mint: 

We have audited the accompanying balance sheets of the United States Mint as of September 30, 2011 and 

2010, and the related statements of net cost, changes in net position, and combined statements of budgetary 

resources (hereinafter referred to as “financial statements”) for the years then ended. These financial 

statements are the responsibility of the United States Mint’s management. Our responsibility is to express 

an opinion on these financial statements based on our audits. 

We conducted our audits in accordance with auditing standards generally accepted in the United States of 

America; the standards applicable to financial audits contained in Government Auditing Standards, issued 

by the Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin 

No. 07-04, Audit Requirements for Federal Financial Statements, as amended. Those standards and OMB 

Bulletin No. 07-04 require that we plan and perform the audits to obtain reasonable assurance about whether 

the financial statements are free of material misstatement. An audit includes consideration of internal control 

over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 

but not for the purpose of expressing an opinion on the effectiveness of the United States Mint’s internal 

control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, 

on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the 

accounting principles used and significant estimates made by management, as well as evaluating the overall 

financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial 

position of the United States Mint as of September 30, 2011 and 2010, and its net costs, changes in net 

position, and budgetary resources for the years then ended in conformity with U.S. generally accepted 

accounting principles. 

26
 
The information in the Management’s Discussion and Analysis, and Required Supplementary Information, is not
	

a required part of the financial statements, but is supplementary information required by U.S. generally accepted
	

accounting principles. We have applied certain limited procedures, which consisted principally of inquiries of
	

management regarding the methods of measurement and presentation of this information. However, we did not audit 

this information and, accordingly, we express no opinion on it. 

Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole.
	

The information in the United States Mint at a Glance, Deputy Director’s Letter, Organizational Profi le, Our Goals
	

and Appendix 1: FY 2011 Coin and Medal Products are presented for purposes of additional analysis and are not 

required as part of the financial statements. This information has not been subjected to auditing procedures and,
	

accordingly, we express no opinion on it.
	

In accordance with Government Auditing Standards, we have also issued our reports dated December 2, 2011, on 

our consideration of the United States Mint’s internal control over financial reporting and our tests of its compliance 

with certain provisions of laws, regulations, and contracts. The purpose of those reports is to describe the scope of 

our testing of internal control over financial reporting and compliance and the results of that testing, and not to
	

provide an opinion on the internal control over financial reporting or on compliance. Those reports are an integral 

part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction 

with this report in assessing the results of our audits.
	

December 2, 2011
	

27
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPARTMENT OF THE TREASURY UNITED STATES MINT 

BALANCE SHEETS 

(dollars in thousands) 

As of September 30, 

2011 2010 

Assets 

Intragovernmental:

 Fund Balance with Treasury (Note 3) $ 752,742 $ 331,944 

Accounts Receivable, Net (Note 4) 721 456 

Advances and Prepayments (Note 5) 2,046 3,178 

Total Intragovernmental Assets 755,509 335,578

 Custodial Gold and Silver Reserves (Note 6) 10,493,740 10,493,740 

Accounts Receivable, Net (Note 4) 18,254 7,365

 Inventory (Notes 7 and 20) 501,287 451,560

 Supplies 17,280 17,138

 Property, Plant and Equipment, Net (Note 8) 185,701 190,295 

Advances and Prepayments (Note 5) 1 2 

Total Non-Intragovernmental Assets $ 11,216,263 $ 11,160,100 

Total Assets (Notes 2 and 14) $ 11,971,772 $ 11,495,678 

Heritage Assets (Note 9) 

Liabilities 

Intragovernmental: 

Accounts Payable $ 5,890 $ 5,798 

Accrued Workers’ Compensation and Benefits 9,377 8,857 

Total Intragovernmental Liabilities 15,267 14,655

 Custodial Liability to Treasury (Note 6) 10,493,740 10,493,740 

Accounts Payable 44,545 32,720

 Surcharges Payable (Note 3) 11,673 13,055 

Accrued Payroll and Benefits 18,381 17,834

 Other Actuarial Liabilities 27,467 26,663

 Unearned Revenue 16,953 1,846

 Deposit Fund Liability (Notes 10 and 12) 94 94 

Total Non-Intragovernmental Liabilities $ 10,612,853 $ 10,585,952 

Total Liabilities (Notes 10 and 14) $ 10,628,120 $ 10,600,607 

Commitments and Contingencies (Notes 12, 13 and 20) 

Net Position 

Cumulative Results of Operations - Earmarked Funds (Note 14) 1,343,652 895,071 

Total Liabilities and Net Position $ 11,971,772 $ 11,495,678 

The accompanying notes are an integral part of these fi nancial statements. 

28
 
2011 2010 

Numismatic Production and Sales

 Gross Cost $ 4,009,361 $ 3,157,758

 Less Earned Revenue (Note 16) (4,178,594) (3,250,844)
	

Net Program Cost (Revenue) (169,233) (93,086)
	

Numismatic Production and Sales of Circulating Coins

 Gross Cost 4,685 5,740

 Less Earned Revenue (Note 16) (4,685) (5,740) 

Net Program Cost – – 

Circulating Production and Sales

 Gross Cost 428,130 317,357

 Less Earned Revenue (Note 16) (428,130) (317,357) 

Net Program Cost – – 

Net Program Cost (Revenue) Before Protection of Assets (169,233) (93,086) 

Protection of Assets

 Protection Costs 41,570 41,547

 Less Earned Revenue (Note 16) – (3) 

Net Cost of Protection Assets 

Net Cost (Revenue) from Operations (Notes 15 and 21) 

41,570 41,544 

$ (127,663) $ (51,542) 

DEPARTMENT OF THE TREASURY UNITED STATES MINT 

STATEMENTS OF NET COST 

(dollars in thousands) 

For the years ended September 30, 

The accompanying notes are an integral part of these fi nancial statements. 

29
 
 

 

 

 

 

 

 

 

 

DEPARTMENT OF THE TREASURY UNITED STATES MINT 

STATEMENTS OF CHANGES IN NET POSITION 

(dollars in thousands) 

For the years ended September 30, 

2011 2010 

Cumulative Results of Operations 

Net Position, Beginning of Year - Earmarked Funds (Note 14) $ 895,071 $ 904,535 

Financing Sources (Note 21): 

Transfers to the Treasury General Fund On-Budget (Note 19) (51,000) (13,000) 

Transfers to the Treasury General Fund Off-Budget (Note 19) - (375,000)

 Other Financing Sources (Seigniorage) (Note 16) 358,577 312,814

 Imputed Financing Sources (Note 11) 13,341 14,180 

Total Financing Sources 320,918 (61,006) 

Net Revenue from Operations (Notes 15 and 21) 127,663 51,542 

Net Position, End of Year - Earmarked Funds (Note 14) $ 1,343,652 $ 895,071 

The accompanying notes are an integral part of these fi nancial statements. 

30
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEPARTMENT OF THE TREASURY UNITED STATES MINT 

STATEMENTS OF BUDGETARY RESOURCES 

(dollars in thousands) 

For the years ended September 30, 

2011 2010 

Budgetary Resources 

Unobligated balance, brought forward October 1 $ 110,993 $ 245,683 

Recoveries of prior-year unpaid obligations 43,873 28,879 

Budget authority

 Spending authority from offsetting collections

 Earned

 Collected 4,969,914 3,519,214

 Change in receivable from federal sources – 50

 Change in unfilled customer orders 

Advance received 15,107 136 

Without advance from federal sources (903) 792

 Subtotal 4,984,118 3,520,192 

Permanently not available (51,000) (13,000) 

Total Budgetary Resources $ 5,087,984 $ 3,781,754 

Status of Budgetary Resources 

Obligations incurred

 Reimbursable (Note 17 and Note 21) $ 4,674,890 $ 3,670,761 

Unobligated balances 

Apportioned 413,094 110,993 

Total Status of Budgetary Resources $ 5,087,984 $ 3,781,754 

Change in Obligated Balances 

Obligated balance, net

 Unpaid obligations, brought forward, October 1 $ 228,454 $ 190,523

 Less: Uncollected customer payments from federal sources, 

brought forward, October 1 (7,598) (6,755) 

Total unpaid obligated balance, net 220,856 183,768 

Obligations incurred, net (Note 17) 4,674,890 3,670,761 

Gross outlays (4,513,223) (3,603,950) 

Recoveries of prior-year unpaid obligations, actual (43,873) (28,879) 

Change in uncollected customer payments from federal sources 903 (842) 

Obligated balance, net, end of the period

 Unpaid obligations 346,248 228,454

 Uncollected customer payments from federal sources (6,694) (7,598) 

Total unpaid obligated balance, net, end of period 339,554 220,856 

Net Outlays 

Net outlays

 Gross outlays 4,513,223 3,603,950

 Collections (4,985,021) (3,519,349) 

Total Outlays $ (471,798) $ 84,601 

The accompanying notes are an integral part of these fi nancial statements. 

31
 
NOTES TO THE FINANCIAL STATEMENTS 

For the Years Ended September 30, 2011 and 2010 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

REPORTING ENTITY Established in 1792, the United States Mint (Mint) is a bureau of the 

Department of the Treasury (Treasury). The mission of the Mint is as follows: To manufacture and 

distribute circulating coins, precious metals and collectible coins, and national medals to meet the 

needs of the United States. Numismatic products include medals; proof coins; uncirculated coins; 

platinum, gold, and silver bullion coins; commemorative coins; and related products or accessories. 

Custodial assets consist of the Treasury-owned gold and silver bullion reserves. These custodial 

reserves are often referred to as “deep storage” and “working stock,” and are reported on the 

Balance Sheet. 

The production of numismatic products is financed through sales to the public. The production of 

circulating coinage is financed through sales of coins at face value to the Federal Reserve Banks 

(FRB). Additionally, the Mint sells certain circulating products directly to the public as numismatic 

items. Activities related to protection of Treasury-owned custodial assets are funded by the United 

States Mint Public Enterprise Fund (PEF). 

Pursuant to Public Law 104-52, Treasury, Postal Service, and General Government Appropriation Act 

for FY 1996, as codified at 31 U.S.C. § 5136, the PEF was established to account for all receipts and 

expenses related to production and sale of numismatic items and circulating coinage, as well as 

protection activities. Expenses accounted for in the PEF include the entire cost of operating the Mint. 

Any amount in the PEF that is determined to be in excess of the amount required by the PEF is 

transferred to the Treasury General Fund. 

Treasury’s Bullion Fund (Bullion Fund) is used to account for Treasury-owned gold and silver reserves. 

A separate Schedule of Custodial Deep Storage Gold and Silver Reserves has been prepared for the deep 

storage portion of the Treasury-owned gold and silver reserves for which the Mint acts as custodian. 

BASIS OF ACCOUNTING AND PRESENTATION The accompanying financial statements were 

prepared based on the reporting format promulgated by Office of Management and Budget (OMB) 

Circular A-136, Financial Reporting Requirements, and in accordance with accounting standards issued 

by the Federal Accounting Standards Advisory Board (FASAB). The Mint’s financial statements have 

been prepared to report the financial position, net cost of operations, changes in net position, and 

budgetary resources, as required by 31 U.S.C. § 5134. 

Management uses estimates and assumptions in preparing financial statements. Those estimates and 

assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets 

and liabilities, and the reported revenues and expenses. Actual results could differ from those 

estimates. Accounts subject to estimates include, but are not limited to, depreciation, imputed costs, 

payroll and benefits, accrued worker’s compensation, allowance for uncollectible accounts receivable, 

and unemployment benefits. 

The accompanying financial statements have been prepared on the accrual basis of accounting. Under 

the accrual method, revenues and other financing sources are recognized when earned and expenses are 

recognized when a liability is incurred, without regard to receipt or payment of cash. 

32
 
 

EARNED REVENUES AND OTHER FINANCING SOURCES (SEIGNIORAGE) 

Numismatic Sales: Revenue from numismatic sales to the public is recognized when products are 

shipped to customers. Prices for most numismatic products are based on the product cost plus a 

reasonable net margin. Bullion coins are priced based on the market price of the precious metals plus 

a premium to cover manufacturing, marketing, and distribution costs. 

Numismatic Sales of Circulating Coins: Specially packaged products containing circulating coins sold 

directly to the public rather than to the FRB. These products are treated as a circulating and numismatic 

hybrid product. Revenue is recognized when products are shipped to customers. 

Circulating Sales: The PEF provides for the sale of circulating coinage at face value to the FRB. 

Revenue from the sale of circulating coins is recognized when the product is shipped to the FRB. 

Revenue from the sale of circulating coins to the FRB and numismatic sales of circulating coins to 

the public is limited to the recovery of the cost of manufacturing, and distributing those coins. 

Other Financing Source (Seigniorage): Seigniorage equals the face value of newly minted coins less 

the cost of production (which includes the cost of metal, manufacturing, and transportation). Seigniorage 

adds to the government’s cash balance, but unlike the payment of taxes or other receipts, it does 

not involve a transfer of financial assets from the public. Instead, it arises from the exercise of the 

government’s sovereign power to create money and the public’s desire to hold financial assets in the 

form of coins. Therefore, the President’s budget excludes seigniorage from receipts and treats it as a 

means of financing. Seigniorage is recognized when coins are shipped to the FRB in return for 

deposits to the PEF. 

Rental Revenue: The Mint sublets office space at cost to other federal entities in the two leased 

buildings in Washington, D.C. In addition, a commercial vendor subleases a portion of the first floor 

space of the building at 801 9th Street, NW. 

FUND BALANCE WITH TREASURY All cash is maintained at the Treasury. Fund Balance with 

Treasury is the aggregate amount of the Mint’s cash accounts with the United States Government’s 

central accounts and from which the Mint is authorized to make expenditures. It is an asset because it 

represents the Mint’s claim to United States Government resources. 

ACCOUNTS RECEIVABLE Accounts receivable are amounts due to the Mint from the public and 

other federal entities. An allowance for uncollectible accounts receivable is established for all accounts 

that are more than 180 days past due. However, the Mint will continue collection action on those 

accounts that are more than 180 days past due, as specified by the Debt Collection Improvement 

Act of 1996. 

INVENTORIES Inventories of circulating and numismatic coinage are valued at either cost or market, 

whichever is lower. Costs of the metal and fabrication components of the inventories are determined 

using a weighted average inventory methodology. Conversion costs (i.e., the cost to convert the 

fabricated blank into a finished coin) are valued using a standard cost methodology. The Mint 

uses three classifications for inventory: raw material (raw metal, unprocessed coil, or blanks); 

work-in-process (WIP – material being transformed to finished coins); and finished goods (coins 

that are packaged or bagged and ready for sale or shipment to the public or the FRB). 

33
 
Computer Equipment 3 to 5 years
	

Software 2 to 10 years
	

Machinery and Equipment 7 to 20 years
	

Structures, Facilities, and Leasehold Improvements 10 to 30 years
	

TREASURY-OWNED CUSTODIAL GOLD AND SILVER BULLION RESERVES Treasuryowned gold and silver reserves consist of both “deep storage” and “working stock” gold and silver. 

Deep Storage is defined as that portion of the Treasury-owned gold and silver bullion reserve which 

the Mint secures in sealed vaults. Deep storage gold comprises the vast majority of the bullion reserve 

and consists primarily of gold bars. Deep storage silver is also primarily in bar form. 

Working Stock is defined as that portion of the Treasury-owned gold and silver bullion reserve which 

the Mint can use as the raw material for minting coins. Working stock gold comprises only about one 

percent of the gold bullion reserve and consists of bars, blanks, unsold coins, and condemned coins. 

Similarly, working stock silver consists of bars, blanks, unsold coins, and condemned coins. 

Treasury allows the Mint to use some of its gold as working stock in the production of gold coins. This 

allows the Mint to avoid the market risk associated with buying gold far in advance of the sales date 

of the gold coins. The Mint replenishes the Treasury gold working stock at or just prior to the time the 

coins are sold. Generally, the Mint does not deplete the working stock used in production. Instead, the 

Mint will purchase a like amount of gold on the open market to replace the working stock used. 

Treasury also allows the Mint to use silver as working stock. However, Treasury does not have enough 

silver to fulfill all Mint manufacturing needs. Accordingly, for the purpose of avoiding market risk 

associated with owning silver, the Mint has entered into a silver hedging arrangement (see Note 20). 

The Mint did not use Treasury silver working stock; if the Mint were to use Treasury silver working 

stock, the stock would be replenished as it is used. 

In the rare cases in which gold or silver is depleted, the Mint reimburses Treasury the current market 

value of the gold or silver depleted. In FY 2011 and 2010, the Mint did not deplete the working stock. 

SUPPLIES Supplies are items that are not considered inventory and are not a part of the finished 

product. These items include plant engineering and maintenance supplies, as well as die steel and coin 

dies. Supplies are accounted for using the consumption method, in which supplies are recognized as 

assets upon acquisition and expensed as they are consumed. 

ADVANCES AND PREPAYMENTS Payments in advance of the receipt of goods and services 

are recorded as an asset at the time of prepayment, and are expensed when related goods and 

services are used. 

PROPERTY, PLANT AND EQUIPMENT Property, plant, and equipment are valued at cost less 

accumulated depreciation. The Mint’s threshold for capitalizing new property, plant, and equipment 

is $25,000 for single purchases and $500,000 for bulk purchases. Depreciation is computed on a 

straight-line basis over the estimated useful lives of the related assets as follows: 

Major alterations and renovations are capitalized over a 20-year period, or the remaining useful life of 

the asset (whichever is shorter) and depreciated using the straight-line method, while maintenance and 

repair costs are charged to expense as incurred. There are no restrictions on the use or convertibility of 

general property, plant, and equipment. 

HERITAGE ASSETS Heritage assets are items that are unique because of their historical, cultural, 

educational or artistic importance. These items are collection-type assets that are maintained for 

exhibition and are preserved indefinitely. 

34
 
LIABILITIES Liabilities represent actual and estimated amounts likely to be paid as a result of 

transactions or events that have already occurred. All liabilities covered by budgetary resources can 

be paid from revenues received by the PEF. 

SURCHARGES Legislation authorizing commemorative coin programs often requires that the sales 

price of each coin include an amount, called a surcharge, which is authorized to provide funds to a 

qualifying organization or group of organizations for the purposes specified. A surcharges payable 

account is established for surcharges collected, but not yet paid, to designated recipient organizations. 

Recipient organizations cannot receive surcharge payments unless all of the Mint’s operating costs 

for the coin program are fully recovered. The Mint may make interim surcharge payments during a 

commemorative program if the recipient organization meets the eligibility criteria in the authorizing 

legislation, if the recovery of all costs of the program is determinable, and if the Mint is assured it is 

not at risk of a loss. Additionally, recipient organizations must demonstrate that they have raised from 

private sources an amount equal to or greater than the surcharges collected based on sales, and recipient 

organizations must prove compliance with Title VI of the Civil Rights Act of 1964. A recipient 

organization has two years from the end of the program to meet the matching requirement. 

EARMARKED FUNDS Pursuant to 31 U.S.C. § 5136, the PEF was established as the sole funding 

source for Mint activities. The PEF meets the requirements of an earmarked fund as defined in 

Statement of Federal Financial Accounting Standard (SFFAS) 27, Identifying and Reporting Earmarked 

Funds. As non-entity and non-PEF assets, the Treasury-owned gold and silver bullion reserves are not 

considered to be earmarked funds. 

UNEARNED REVENUES These are amounts received for numismatic orders which have not yet 

been shipped to the customer. 

RETURN POLICY If for any reason a numismatic customer is dissatisfied, the entire product must 

be returned within seven days of receiving the order to receive a refund or replacement. Shipping 

charges are not refunded. Further, the Mint will not accept partial returns or issue partial refunds. 

Historically, the Mint receives few returns, which are immaterial. Therefore, no reserve for returns 

is considered necessary. 

SHIPPING AND HANDLING The Mint reports shipping and handling costs of circulating coins and 

numismatic products as a cost of goods sold. General postage costs for handling administrative mailings 

are reported as part of the Mint’s general and administrative expenses. 

ANNUAL, SICK AND OTHER LEAVE Annual leave is accrued when earned and reduced as leave 

is taken. The balance in the accrued leave account is calculated using current pay rates. Sick leave and 

other types of non-vested leave are charged to operating costs as they are used. 

ACCRUED WORKERS’ COMPENSATION AND OTHER ACTUARIAL LIABILITIES The 

Federal Employees’ Compensation Act (FECA) provides income and medical cost protection to cover 

Federal civilian employees injured on the job or who have developed a work-related occupational 

disease, and to pay beneficiaries of employees whose deaths are attributable to job-related injuries 

or occupational disease. The FECA program is administered by the United States Department 

of Labor (DOL), which pays valid claims and subsequently seeks reimbursement from the Mint for 

these paid claims. 

35
 
The FECA liability is based on two components. The first component is based on actual claims paid by 

DOL but not yet reimbursed by the Mint. There is generally a two- to three-year time period between 

payment by DOL and DOL’s requesting payment from the Mint. The second component is the actuarial 

liability, which estimates the liability for future payments as a result of past events. The actuarial 

liability includes the expected liability for death, disability, medical and miscellaneous costs for 

approved compensation cases. 

PROTECTION COSTS Treasury-owned gold and silver reserves are in the custody of the Mint, 

which is responsible for safeguarding the reserves. These costs are borne by the Mint, but are not 

directly related to the circulating or numismatic coining operations of the United States Mint. 

The Protection Department is a separate function from coining operations and is responsible for 

safeguarding the reserves as well as Mint employees and facilities. 

OTHER COST AND EXPENSES (MUTILATED AND UNCURRENT) Other costs and expenses 

consist primarily of returns of mutilated or uncurrent coins to the Mint. Coins that are chipped, fused, 

and/or not machine-countable are considered mutilated. The Mint reimburses the entity that sent in the 

mutilated coins, using weight formulas that estimate the face value of these coins. Uncurrent coins are 

worn, but machine-countable, and their genuineness and denominations are still recognizable. Uncurrent 

coins are replaced with new coins of the same denomination by the FRB. The FRB then seeks 

replacement coins from the Mint. All mutilated or uncurrent coins received by the Mint are sold to its 

fabrication contractors to be processed into coils or blanks to be used in future coin production. 

TAX EXEMPT STATUS As a bureau of the Federal Government, the Mint is exempt from all 

taxes imposed by any governing body, whether it is a federal, state, commonwealth, local, or 

foreign government. 

CONCENTRATIONS The Mint purchases the coil and blanks used in the production of circulating 

coins from three vendors at competitive market prices. The Mint also purchases precious metal blanks 

from four different suppliers. 

CONTINGENT LIABILITIES Certain conditions exist as of the date of the financial statements that 

may result in a loss to the government, but which will be resolved only when one or more future 

events occur or fail to occur. The Mint recognizes a loss contingency when the future outflow or other 

sacrifice of resources is probable and reasonably estimable. Loss contingencies that are determined by 

management to have a reasonably possible chance of occurring or that cannot be estimated are included 

as a footnote to the financial statements. Contingent liabilities considered remote are generally not 

disclosed unless they involve guarantees, in which case the nature of the guarantee is disclosed. 

TRANSFERS TO THE TREASURY GENERAL FUND The Mint transfers amounts determined to 

be in excess of the amounts required for Mint operations and programs to the Treasury General Fund 

periodically throughout the fiscal year. 

Seigniorage derived from the sale of circulating coins and net income from the revenues generated by 

the sale of numismatic products containing circulating coins is an off-budget receipt to the Treasury 

General Fund. Off-budget means that these funds cannot be used to reduce the annual budget deficit. 

Instead, they are used as a financing source (i.e., they reduce the amount of cash that Treasury has to 

borrow to pay interest on the national debt). 

Revenues generated from the sale of numismatic products are transferred to the Treasury General Fund 

as an on-budget receipt. Unlike seigniorage, the numismatic transfer amount is available to the Federal 

Government as current operating cash or it can be used to reduce the annual budget deficit. 

36
 
(dollars in thousands) 2011 2010 

Custodial Gold Reserves (Deep Storage) $ 10,355,539 $ 10,355,539 

Custodial Silver Reserves (Deep Storage) 9,148 9,148 

Custodial Gold Reserves (Working Stock) 117,514 117,514 

Custodial Silver Reserves (Working Stock) 11,539 11,539 

Total Non-entity Assets 10,493,740 10,493,740 

Total Entity Assets 

Total Assets 

1,478,032 1,001,938 

$ 11,971,772 $ 11,495,678 

 

 

 

 

 

BUDGETARY RESOURCES The Mint does not receive an appropriation from the Congress. Instead, 

the Mint receives all financing from the public and the FRB, and receives an apportionment of those 

funds from OMB. This apportionment is considered a budgetary authority, which allows the Mint to 

spend the funds. The Mint’s budgetary resources consist of unobligated balances, transfers, and 

spending authority from offsetting collections, which is net of amounts that are permanently not 

available. “Permanently not available” funds are on-budget transfers to the General Fund. 

HEDGING The Mint engages in a hedging program to avoid fluctuation in silver costs as a result of 

the changes in market prices. The Mint purchases silver in large quantities and sells an interest in that 

silver to a trading partner, while maintaining physical custody and title to the silver. Sales of silver to 

the trading partner are made at the same spot price that the Mint paid to obtain the silver on the open 

market. The partner’s interest in Mint silver is reduced as finished silver bullion coins are sold to 

authorized purchasers (APs). Repurchases of the trading partner’s interest in the silver occurs upon sale 

of coins by the Mint. Repurchases are made on the same day as sales, in the same quantity sold, and 

using the same spot price as was used for the sale to the AP. Each sale to and from the trading partner 

carries a small transaction fee, the selling and buying fees net to a cost of one-half cent per ounce. 

The Mint incurred $217 thousand in hedging fees in FY 2011, compared to $170 thousand incurred 

in FY 2010. 

RECLASSIFICATIONS Certain amounts have been reclassified to conform to the September 30, 

2011 presentation. 

2. NON-ENTITY ASSETS 

Components of Non-entity Assets as of September 30 are as follows: 

Entity assets are assets that the reporting entity has authority to use in its operations. Mint management 

has legal authority to use entity assets to meet entity obligations. Treasury-owned gold and silver 

bullion reserves, for which the Mint is custodian, are non-entity assets. 

3. FUND BALANCE WITH TREASURY 

Fund Balance with Treasury as of September 30 consists of the following: 

(dollars in thousands) 2011 2010 

Revolving Fund $ 752,648 $ 331,850 

Other 94 94 

Total Fund Balance with Treasury $ 752,742 $ 331,944 

Status of Fund Balance with Treasury 

Unobligated Balance $ 413,094 $ 110,993 

Obligated Balance, Not Yet Disbursed 339,554 220,857 

Non-Budgetary FBWT 94 94 

Total $ 752,742 $ 331,944 

37
 
 

Allowance Net Receivables 

($5,946) $ 721 

(612) 18,254 

($6,558) $ 18,975

 

 

 

 

 

 

 

 

 

 

 

The Mint does not receive appropriated budget authority. The Fund Balance with Treasury is entirely 

available for use to support United States Mint operations. At September 30, 2011 and 2010, the 

revolving fund balance included $11.7 million and $13.1 million, respectively, in restricted amounts 

for possible payment of surcharges to recipient organizations. 

4. ACCOUNTS RECEIVABLE, NET 

Components of accounts receivable are as follows: 

(dollars in thousands) September 30, 2011

Gross Receivables 

Intragovernmental $ 6,667 

With the Public 18,866 

Total Accounts Receivable $ 25,533 

September 30, 2010

Gross Receivables Allowance Net Receivables 

Intragovernmental $ 6,402 ($5,946) $ 456 

With the Public 9,055 (1,690) 7,365 

Total Accounts Receivable $ 15,457 ($7,636) $ 7,821 

The intragovernmental accounts receivable as of September 30, 2011 and 2010 was $6.6 million and 

$6.4 million, respectively. This largely represents amounts due to the Mint for a joint numismatic 

product with another federal entity. Management determined that the collection of $5.9 million related 

to the program was in doubt and has included that amount in the allowance for doubtful accounts. 

Receivables with the public at September 30, 2011 are $18.9 million, of which $13.4 million is owed 

by fabricators for scrap and webbing, in addition to amounts owed by the public for numismatic products. 

This compares to receivables with the public at September 30, 2010, of $9.1 million, of which $6.1 

million was owed by fabricators for scrap and webbing, in addition to amounts owed by the public for 

numismatic products. The allowance for doubtful accounts is the balance of the accounts receivable 

with the public that is past due by 180 days or more. Collection action continues on these accounts, 

but an allowance is recorded. 

5. ADVANCES AND PREPAYMENTS 

The components of advances and prepayments as of September 30 are as follows: 

(dollars in thousands) 2011 2010 

Intragovernmental $ 2,046 $ 3,178 

With the Public 1 2 

Total Advances and Prepayments $ 2,047 $ 3,180 

Intragovernmental advances and prepayments as of September 30, 2011 and 2010 include $1.5 million 

and $1.7 million, respectively, that the Mint paid the Treasury Working Capital Fund for a variety of 

centralized services. The remaining balance of approximately $500 thousand represents payments 

made to the United States Postal Service for product delivery services as of September 30, 2011, 

compared to approximately $1.4 million paid at September 30, 2010. Advances with the public 

for both FY 2011 and 2010 are outstanding travel advances to Mint employees who were traveling 

on government business. 

38
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6. CUSTODIAL GOLD AND SILVER BULLION RESERVES 

As custodian, the Mint is responsible for safeguarding much of the Treasury-owned gold and silver 

bullion reserves, which include deep storage and working stock. The asset and the custodial liability to 

Treasury are reported on the Balance Sheet at statutory rates. In accordance with 31 U.S.C. § 5117(b) 

and 31 U.S.C. § 5116(b)(2), statutory rates of $42.2222 per fine troy ounce (FTO) of gold and no less 

than $1.292929292 per FTO of silver are used to value the entire custodial reserves held by the Mint. 

The market value for gold and silver as of September 30 is determined by the London Gold Fixing 

(PM) rate. Amounts and values of custodial gold and silver in custody of the United States Mint as 

of September 30 are as follows:

 2011 2010 

Gold - Deep Storage:

 Inventories (FTO) 245,262,897 245,262,897

 Market Value ($ per FTO) $ 1,620.00 $ 1,307.00

 Market Value ($ in thousands) $ 397,325,893 $ 320,558,606

 Statutory Value ($ in thousands) $ 10,355,539 $ 10,355,539 

Gold - Working Stock:

 Inventories (FTO) 2,783,219 2,783,219

 Market Value ($ per FTO) $ 1,620.00 $ 1,307.00

 Market Value ($ in thousands) $ 4,508,815 $ 3,637,667

 Statutory Value ($ in thousands) $ 117,514 $ 117,514 

Silver - Deep Storage:

 Inventories (FTO) 7,075,171 7,075,171

 Market Value ($ per FTO) $ 30.45 $ 22.07

 Market Value ($ in thousands) $ 215,439 $ 156,149

 Statutory Value ($ in thousands) $ 9,148 $ 9,148 

Silver - Working Stock:

 Inventories (FTO) 8,924,829 8,924,829

 Market Value ($ per FTO) $ 30.45 $ 22.07 

Market Value ($ in thousands) $ 271,761 $ 196,971 

Statutory Value ($ in thousands) $ 11,539 $ 11,539 

Total Market Value of Custodial Gold 

and Silver Reserves ($ in thousands) $ 402,321,908 $ 324,549,393 

Total Statutory Value of Custodial Gold 

and Silver Reserves ($ in thousands) $ 10,493,740 $ 10,493,740 

39
 
(dollars in thousands) September 30, 2011 

Asset Cost Accumulated Depreciation Total Property, Plant

 and Amortization and Equipment, Net 

Land $ 2,529 $ - $ 2,529 

Structures, Facilities and

 Leasehold Improvements 225,500 (148,387) 77,113 

Computer Equipment 31,235 (28,052) 3,183 

Software 15,893 (15,051) 842 

Construction-In-Progress 12,875 - 12,875 

Machinery and Equipment 282,256 (193,097) 89,159 

Total Property, Plant

 and Equipment, Net $ 570,288 ($384,587) $ 185,701 

(dollars in thousands) September 30, 2010 

Asset Cost Accumulated Depreciation Total Property, Plant

 and Amortization and Equipment, Net 

Land $ 2,529 $ – $ 2,529 

Structures, Facilities and

 Leasehold Improvements 217,840 (141,780) 76,060 

Computer Equipment 30,229 (28,332) 1,897 

Software 19,136 (18,014) 1,122 

Construction-In-Progress 9,305 – 9,305 

Machinery and Equipment 275,091 (175,709) 99,382 

Total Property, Plant

 and Equipment, Net $ 554,130 ($363,835) $ 190,295 

(dollars in thousands) 2011 2010 

Raw Materials $ 322,484 $ 243,903 

Work-In-Process 87,754 109,933 

Inventory held for current sale 

Total Inventory 

91,049 97,724 

$ 501,287 $ 451,560 

7. INVENTORY 

The components of inventories as of September 30 are summarized below: 

Raw materials consist of unprocessed materials and by-products of the manufacturing process and the 

metal value of unusable inventory, such as scrap or condemned coins, which will be recycled into a 

usable raw material. In addition, as of September 30, 2011 and 2010, the raw material inventory 

includes $247.7 million and $111.4 million, respectively, the market value of the silver hedged. 

Additional information can be found in note 20. Work-in-process consists of semi-finished materials. 

8. PROPERTY, PLANT AND EQUIPMENT, NET 

Components of property, plant and equipment are as follows: 

The land and buildings used to manufacture circulating coinage and numismatic products are owned 

by the Mint and located in Philadelphia, Denver, San Francisco, and West Point. In addition, the Mint 

owns the land and buildings at the United States Bullion Depository at Fort Knox. Construction-InProgress (CIP) represents assets that are underway, such as in the process of being readied for use, or 

which are being tested for acceptability, but which are not yet being fully utilized by the Mint and, 

therefore, not being depreciated. 

Depreciation and amortization expenses charged to operations during the years ended September 30, 

2011 and 2010, were $29.5 million and $32.7 million, respectively. 

40
 
Coin Collections Quantity of Collections Held September 30,

 2011 2010 

Pattern Pieces/Prototypes 1 1 

Coin Specimens 1 1 

Quality Samples 1 1 

Exotic Metal Coin Samples 

Total 

1 

 4 

1 

 4 

Historical Artifacts Quantity of Collections Held September 30,

 2011 2010 

Antiques/Artifacts 1 1 

Plasters 1 1 

Galvanos 1 1 

Dies 1 1 

Punches 1 1 

Historical Documents 1 1 

Multi-use heritage asset 

Total 

4

10 

4 

10 

(dollars in thousands) 2011 2010 

Custodial Gold Reserves (Deep Storage) $ 10,355,539 $ 10,355,539 

Custodial Silver Reserves (Deep Storage) 9,148 9,148 

Working Stock Inventory - Gold 117,514 117,514 

Working Stock Inventory - Silver 11,539 11,539 

Other 94 94 

Total Liabilities Not Covered by Budgetary Resources $ 10,493,834 $ 10,493,834 

Total Liabilities Covered by Budgetary Resources 

Total Liabilities 

134,286 106,773 

$ 10,628,120 $ 10,600,607 

9. HERITAGE ASSETS 

The Mint maintains collections of heritage assets which are any property, plant, or equipment that is 

retained by the Mint for its historic, natural, cultural, educational or artistic value, or significant 

architectural characteristics. For example, the Mint’s historical artifacts contain, among other things, 

examples of furniture and equipment used in the Mint facilities over the years, as well as examples 

of the coin manufacturing process, such as plasters, galvanos, dies, punches, and actual finished coins. 

The coin collections include examples of the various coins produced by the Mint over the years, 

separated into collections of pattern pieces/prototypes, coin specimens, quality samples, and exotic 

metal coin samples. The buildings housing the Mint at Denver, West Point, San Francisco, and Fort 

Knox are all considered multi-use heritage assets. The Mint generally does not place a value on heritage 

assets, even though some of the coins and artifacts are priceless. However, the assets are accounted for 

and controlled for protection and conservation purposes. Heritage assets held by the Mint are generally 

in acceptable physical condition. The following chart represents the Mint’s various collections and 

historical artifacts. 

10. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES 

Components of Liabilities Not Covered by Budgetary Resources as of September 30 are as follows: 

Liabilities not covered by budgetary resources represent the Mint’s custodial liabilities to the Treasury 

that are entirely offset by Treasury-owned gold and silver bullion reserves held by the Mint on behalf 

of the federal government. The category “Other” represents a refundable security deposit related 

to a lease. 

41
 
(dollars in thousands) 2011 2010 

Social Security System $ 7,230 $ 7,437 

Civil Service Retirement System 1,276 1,514 

Federal Employees Retirement System

 (Retirement and Thrift Savings Plan) 

Total Retirement Plans and Other Post-employment Cost 

12,722 12,157 

$ 21,228 $ 21,108 

 

 

 

 

 

11. RETIREMENT PLANS, OTHER POST-EMPLOYMENT COSTS AND OTHER 

IMPUTED COSTS 

The Mint contributes seven percent of basic pay for employees participating in the Civil Service 

Retirement System (CSRS). Most employees hired after December 31, 1983, are automatically covered 

by the Federal Employees’ Retirement System (FERS) and Social Security. A primary feature of FERS 

is that it offers a savings plan to which the Mint automatically contributes one percent of basic pay and 

matches employee contributions up to an additional 4 percent of basic pay. Employees can contribute 

a specific dollar amount or a percentage of their basic pay, as long as the annual dollar total does not 

exceed the Internal Revenue Code limit of $16,500 for calendar year 2011 (a $5,500 catch-up 

contribution can be given by participants age 50 and older). Employees participating in FERS are 

covered by the Federal Insurance Contribution Act (FICA), for which the Mint contributes a matching 

amount to the Social Security Administration. 

Although the Mint contributes a portion for pension benefits and makes the necessary payroll 

deductions, it is not responsible for administering either CSRS or FERS. Administering and reporting 

on pension benefit programs are the responsibility of the Office of Personnel Management (OPM). 

OPM has provided the Mint with certain cost factors that estimate the cost of providing the pension 

benefit to current employees. The cost factors of 30.1 percent of basic pay for CSRS-covered employees 

and 13.8 percent of basic pay for FERS-covered employees were in use for FY 2011. The CSRS and 

FERS factors were the same in FY 2010 to FY 2011. 

The amounts that the Mint contributed to the retirement plans and social security for the year ended 

September 30 are as follows: 

The Mint also recognizes its share of the future cost of pension payments and post-retirement health 

and life insurance benefits for employees while they are still working with an offset classified as 

imputed financing. OPM continues to report the overall liability of the Federal Government and make 

direct recipient payments. OPM has provided certain cost factors that estimate the true cost of providing 

the post-retirement benefit to current employees. The cost factors relating to health benefits are $6,027 

and $5,906 per employee enrolled in the Federal Employees Health Benefits Program in FY 2011 and 

FY 2010, respectively. The cost factor relating to life insurance is two-one hundredths percent (.02 

percent) of basic pay for employees enrolled in the Federal Employees Group Life Insurance Program 

for both FY 2011 and FY 2010. 

The amount of imputed cost related to retirement plans and other post-employment costs incurred by 

the Mint for the year ended September 30 is as follows (before the offset for imputing financing): 

(dollars in thousands) 2011 2010 

Health Benefits $ 8,673 $ 8,748 

Life Insurance 26 21 

Pension Expense 4,372 5,411 

Total Imputed Retirement and Postemployment Costs $ 13,071 $ 14,180 

42
 
 

 

 

 

 

 

In addition to the pension and retirement benefits described above, the United States Mint also records 

imputed costs and financing for Treasury Judgment Fund payments made on behalf of the bureau. 

Entries are made in accordance with FASAB Interpretation No. 2. For FY 2011 entries for Judgment 

Fund payments totaled $270 thousand (Other Funds). For FY 2010, there we no payments by the

Judgment Fund on behalf of the Unites States Mint. 

12. LEASE COMMITMENTS 

THE MINT AS LESSEE: The Mint leases office and warehouse space from commercial vendors, 

the General Services Administration (GSA), and the Bureau of Engraving and Printing. In addition, 

the bureau leases copier and other office equipment from commercial vendors and vehicles from GSA. 

With the exception of the commercial leases on two office buildings in Washington, D.C., all leases 

are one-year, or one-year with renewable option years. The two building leases in Washington, D.C. 

have terms of 20 and 10 years. One of the building leases will not be renewed and will be cancelled 

on October 31, 2011. Because all of the Mint’s leases can be canceled, there are no minimum lease 

payments due. 

THE MINT AS LESSOR: The Mint sublets office space at cost to several other federal entities in 

the two leased buildings in Washington, D.C. These subleases vary from one year with option years 

to multiple-year terms. As of September 30, 2011, the Mint sublet in excess of 209,000 square feet in 

the two leased buildings. Tenants include the Internal Revenue Service, Treasury Executive Institute, 

Bureau of the Public Debt, U.S. Customs and Border Protection, and U.S. Marshals Service. Starting 

October 31, 2011, the lease of space in the building at 799 9th Street, NW, containing 149,647 square 

feet, was not renewed. All of the subleases are operating leases and subject to annual availability 

of funding. The Mint has also entered into an agreement to sublet space in the Headquarters building 

to a commercial tenant. The Mint received a security deposit from the tenant of $94,500. 

Future Projected Receipts (dollars in thousands): Building Sub-lease 

Year 2 (FY 2012) 302,400 

Year 3 (FY 2013) 378,000 

Year 4 (FY 2014) 378,000 

Year 5 (FY 2015) 378,000 

Years 6-9 (FY 2016 - FY 2019) 1,617,840 

Total Future Operating Lease Receipts $ 3,054,240 

13. CONTINGENCIES 

The Mint is subject to legal proceedings and claims which arise in the ordinary course of its business. 

Judgments, if any, resulting from pending litigation against the Mint generally would be satisfied from 

the PEF. Likewise, under the Notifi cation and Federal Employee Antidiscrimination and Retaliation 

Act of 2002 (No FEAR Act, P. L. 107-174), settlements and judgments related to acts of discrimination 

and retaliation for whistle blowing will be paid from the PEF. In the opinion of management, the 

ultimate resolution of these actions will not materially affect the Mint’s financial position or the results 

of its operations. 

The Chief Counsel of the United States Mint provided a Legal Representation Letter reflecting no 

expected material loss resulting from pending legal cases. 

43
 

re
(dollars in thousands) 2011 2010 

Numismatic Production and Sales 

Cost:

 Intragovernmental:

 Selling, General and Administrative $ 23,863 $ 20,140

 Imputed Costs 6,152 4,335
	

 Total Intragovernmental Costs 30,015 24,475

 Public:

 Cost of Goods Sold 3,912,375 3,069,173

 Selling, General and Administrative 66,971 64,110
	

 Total Public Cost 3,979,346 3,133,283 

Gross Cost 4,009,361 3,157,758 

Revenue:

 Intragovernmental:

 Rent Revenues 10,232 10,790

Other Intragovernmental Revenues 

 Total Intragovernmental Revenues 

65 65
	

10,297 10,855

 Public 4,168,297 3,239,989
	

 Total Earned Revenue 

Net Program Cost (Revenue) 

4,178,594 3,250,844
	

$ (169,233) $ (93,086) 

Numismatic Production and Sales of Circulating Coins 

Cost:

 Intragovernmental:

 Selling, General and Administrative $ 166 $ 549
	

 Total Intragovernmental Costs 166 549

 Public:

 Cost of Goods Sold 4,054 3,444

 Selling, General and Administrative 465 1,747
	

 Total Public Cost 4,519 5,191 

Gross Cost 4,685 5,740 

Revenue:

 Public 4,685 5,740
	

 Total Earned Revenue 

Net Program Cost (Revenue) 

4,685 5,740
	

$ – $ – 

 

14. EARMARKED FUNDS 

Pursuant to 31 U.S.C. § 5136, “all receipts from Mint operations and programs, including the production 

and sale of numismatic items, the production and sale of circulating coinage at face value to the FRB, 

the protection of government assets, and gifts and bequests of property, real or personal shall be 

deposited into the PEF and shall be available to fund its operations without fiscal year limitations.” 

The PEF meets the requirements of an earmarked fund as defined in SFFAS 27, Identifying and 

Reporting Earmarked Funds. As non-entity and non-PEF assets, the Treasury-owned gold and silver 

bullion reserves are not included in the earmarked funds. 

15. INTRAGOVERNMENTAL COSTS AND EARNED REVENUE 

Intragovernmental costs and earned revenue reflect transactions in which both the buyer and seller are 

federal entities. Revenue with the public reflects transactions for goods or services with a non-federal 

entity. The purpose for this classification is to enable the federal government to prepare consolidated 

financial statements. The following table provides earned revenues, gross cost, and net program revenue: 

44
 
 2011 2010 

Circulating Production and Sales 

Cost:

 Intragovernmental:

 Selling, General and Administrative $ 9,546 $ 12,608

 Imputed Costs 7,189 9,844 

 Total Intragovernmental Costs 16,735 22,452

 Public:

 Cost of Goods Sold 334,222 220,932

 Selling, General and Administrative 53,893 65,559

 Other Costs and Expenses (Mutilated and Uncurrent) 23,280 8,414 

 Total Public Cost 411,395 294,905

 Gross Cost 428,130 317,357 

Revenue:

 Public 428,130 317,357 

 Total Earned Revenue 428,130 317,357 

Net Program Cost $ – $ – 

Net Program Cost (Revenue) Before Protection of Assets $ (169,233) $ (93,086) 

Protection of Assets

 Public:

 Protection Cost $ 41,570 $ 41,547 

 Total Earned Revenue $ – $ 3

 Net Cost of Protection of Assets $ 41,570 $ 41,544

 Net Cost (Revenue) from Operations $ (127,663) $ (51,542) 

(dollars in thousands) 2011 2010 

Revenue-FRB $ 428,130 $ 317,357 

Seigniorage-FRB 348,780 300,887 

Total Circulating Coins $ 776,910 $ 618,244 

Revenue-with the public $ 4,685 $ 5,740 

Seigniorage-with the public 9,797 11,927 

Total Numismatic Sales of Circulating Coins 

Total Seigniorage 

$ 

$ 

 14,482 $ 17,667 

 358,577 $ 312,814 

16. EARNED REVENUE AND OTHER FINANCING SOURCE (SEIGNIORAGE) 

The Statement of Net Cost reflects the earned revenue and corresponding gross costs for Circulating 

Production and Sales and for Numismatic Production and Sales of Circulating Coins. Circulating 

Production and Sales represents coin sales to the FRB, and Numismatic Production and Sales of 

Circulating Coins represents sales of circulating coins to the public (i.e., numismatic customers). 

SFFAS Number 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling 

Budgetary and Financial Accounting, limits the amount of net program revenue from production of 

circulating coins to the cost of metal, manufacturing and transportation. OMB Circular A-136 defines 

the treatment of other financing sources on the Statement of Changes in Net Position, particularly as 

it relates to seigniorage. Therefore, on the Statement of Net Cost, earned revenue is recognized only 

to the extent of the gross cost of production. The difference between those costs and the face value of 

the coin is an “Other Financing Source” referred to as seigniorage. Any revenue over face value for 

circulating coins sold as numismatic items is considered earned revenue and included in the category 

Numismatic Production and Sales on the Statement of Net Cost. 

The following chart reflects the two components of the receipts from the sale of circulating coin – the 

earned revenue from the Statement of Net Costs and Seigniorage from the Statement of Changes in Net 

position for the year ended September 30: 

45

 

 

 Resources Budget 

United States Mint Public Enterprise Fund 

Total Budgetary Resources 3,782 3,782 

Status of Budgetary Resources:

 Obligations Incurred 3,671 3,671

 Unobligated Balances-available 111 111 

Total Status of Budgetary Resources 

Net Outlays 

3,782 3,782 

85 85 

17. APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED 

The Mint receives apportionments of its resources from OMB. An apportionment is a plan approved 

by OMB to spend funds as directed by law. All Mint obligations are classified as reimbursable, as they 

are financed by offsetting collections received in return for goods and services provided. OMB usually 

uses one of two categories to distribute budgetary resources. Category A apportionments distribute 

budgetary resources by fiscal quarters. Category B apportionments typically distribute budgetary 

resources by activities, projects, objects or a combination of these categories. The Mint has only 

category B apportionments. 

18. EXPLANATION OF DIFFERENCES BETWEEN THE STATEMENT OF BUDGETARY 

RESOURCES AND THE BUDGET OF THE UNITED STATES GOVERNMENT 

SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling 

Budgetary and Financial Accounting, requires an explanation of material differences between the 

Statement of Budgetary Resources (SBR) and the related actual balances published in the Budget of 

the United States Government (President’s Budget). The President’s Budget for fiscal year FY 2011 is 

expected to be published in February 2012 and made available through OMB. Therefore, the analysis 

presented here is for the prior year (FY 2010) “actual” figures published in the President’s budget 

in February 2011. The following chart displays the comparison of the FY 2010 SBR and the actual 

FY 2010 balances included in the FY 2012 President’s Budget. 

(rounded to millions) September 30, 2010

 Statement of Budgetary President’s

19. LEGAL ARRANGEMENTS AFFECTING USE OF UNOBLIGATED BALANCES 

The PEF statute establishes that all receipts from Mint operations and programs, including the 

production and sale of numismatic items, the production and sale of circulating coinage, the protection 

of government assets, and gifts and bequests of property, real or personal, shall be deposited into the 

Mint PEF and shall be available without fiscal year limitations. Any amount that is in excess of the 

amount required by the PEF shall be transferred to the Treasury for deposit as miscellaneous receipts. 

At September 30, 2011 and 2010, the Mint transferred excess receipts to the Treasury General Fund 

of $51 million and $388 million, respectively. 

20. HEDGING PROGRAM 

At September 30, 2011 and 2010, the market value of the silver sold to the trading partner and not 

yet sold by the Mint and, therefore, not repurchased from the trading partner was $247.7 million and 

$111.4 million respectively. In addition, the trading partner owed the Mint $4.3 million in unpaid 

realized gains at September 30, 2011 and the Mint owed the trading partner $5.7 million in unpaid 

realized losses at September 30, 2010. In FY 2011, the Mint recorded an unrealized loss of $710 

thousand compared to an unrealized gain of $2.5 million in FY 2010. 

46
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21. RECONCILIATION OF NET COST OF OPERATIONS TO BUDGET
	

(dollars in thousands) For The Years Ended September 30,

 2011 2010 

Resources Used to Finance Activities:

 Budgetary Resources Obligated

 Obligations Incurred $ 4,674,890 $ 3,670,761

 Less: Spending Authority from

 Offsetting Collections and Recoveries 5,027,991 3,549,070

 Net Obligations (353,101) 121,691

 Other Resources 

Transfers to the Treasury General Fund On-Budget (51,000) (13,000) 

Transfers to the Treasury General Fund Off-Budget – (375,000)

 Imputed Financing from Costs Absorbed by Others 13,341 14,180

 Other Financing Sources (Seigniorage) 358,577 312,814

 Net Other Resources Used to Finance Activities 320,918 (61,006) 

Total Resources Used to Finance Activities (32,183) 60,685 

Resources Used to Finance Items Not Part 

of the Net Cost of Operations:

 Change in Budgetary Resources Obligated for Goods,

 Services and Benefits Ordered but Not Yet Provided 88,670 43,347

 Resources that Finance the Acquisition

 of Assets or Liquidation of Liabilities 463,062 370,845

 Other (51,547) (14,593) 

Total Resources Used to Finance Items

 Not Part of the Net Cost of Operations 500,185 399,599 

Total Resources Used to Finance the Net Cost of Operations (532,368) (338,914) 

Components not Requiring or Generating 

Resources in the Current Period

 Depreciation and Amortization 29,491 32,665

 Revaluation of Assets 870 (1,204)

 Other 374,344 255,911 

Total Components not Requiring or Generating

 Resources in the Current Period 404,705 287,372 

Net Cost (Revenue) from Operations $ (127,663) $ (51,542) 

22. UNDELIVERED ORDERS AT THE END OF THE PERIOD 

Budgetary resources obligated for undelivered orders as of September 30, 2011 and 2010 were 

$242,636 and $139,762 respectively. 

47
 
REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) 

For the Years Ended September 30, 2011 and 2010 

INTRODUCTION 

This section provides the Required Supplemental Information as prescribed by the Office of Management and Budget 

(OMB) Circular A-136, “Financial Reporting Requirements” and Statement of Federal Financial Accounting 

Standards (SFFAS) #29 Heritage Assets and Stewardship Land. 

HERITAGE ASSETS 

The Mint is steward of a large, unique and diversified body of heritage assets that demonstrate the social, educational 

and cultural heritage of the Mint. These items include a variety of rare and semi-precious coin collections and 

historical artifacts, and are held at various Mint locations. Some of these items are placed in locked vaults within 

the Mint, where access is limited to only special authorized personnel. Other items are on full display to the public, 

requiring little if any authorization to view. 

Included in the heritage assets are the buildings housing the Mint at Denver, West Point, San Francisco, and Fort 

Knox. The Mint generally does not place a value on heritage assets, even though some of the coins and artifacts are 

priceless. However, the assets are accounted for and controlled for protection and conservation purposes. Heritage 

assets held by the Mint are generally in acceptable physical condition, and there is no deferred maintenance on the 

Denver, West Point, San Francisco, and Fort Knox buildings. 

48
 
Independent Auditors’ Report on Internal Control Over Financial Reporting
	

Inspector General 

United States Department of the Treasury 

Deputy Director 

United States Mint: 

We have audited the balance sheets of the United States Mint as of September 30, 2011 and 2010 and the 

related statements of net cost, changes in net position, and combined statements of budgetary resources 

(hereinafter referred to as “financial statements”) for the years then ended, and have issued our report 

thereon dated December 2, 2011. 

We conducted our audits in accordance with auditing standards generally accepted in the United States of 

America; the standards applicable to financial audits contained in Government Auditing Standards, issued 

by the Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin 

No. 07-04, Audit Requirements for Federal Financial Statements, as amended. Those standards and OMB 

Bulletin No. 07-04 require that we plan and perform the audits to obtain reasonable assurance about 

whether the financial statements are free of material misstatement. 

The management of the United States Mint is responsible for establishing and maintaining effective internal 

control. In planning and performing our fiscal year 2011 audit, we considered the design effectiveness 

of the United States Mint’s internal control over financial reporting by obtaining an understanding of the 

United States Mint’s internal control, determining whether internal controls had been placed in operation, 

assessing control risk, and performing tests of controls as a basis for designing our auditing procedures for 

the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an 

opinion on the effectiveness of the United States Mint’s internal control over financial reporting. Accordingly, 

we do not express an opinion on the effectiveness of the United States Mint’s internal control over financial 

reporting. We did not test all internal controls relevant to operating objectives as broadly defined by the 

Federal Managers’ Financial Integrity Act of 1982. 

A deficiency in internal control exists when the design or operation of a control does not allow management 

or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct 

misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in 

internal control such that there is a reasonable possibility that a material misstatement of the entity’s 

financial statements will not be prevented, or detected and corrected on a timely basis. 

49
 
 

 

 

Our consideration of internal control over financial reporting was for the limited purpose described in the third 

paragraph of this report and was not designed to identify all deficiencies in internal control over financial reporting 

that might be deficiencies, significant deficiencies, or material weaknesses. In our fiscal year 2011 audit, we did not 

identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as 

defined above. However, we identified a deficiency in internal control over financial reporting described in Exhibit 

I that we consider to be a significant deficiency in internal control over financial reporting. A significant deficiency 

is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet 

important enough to merit attention by those charged with governance. 

The United States Mint’s response to the finding identified in our audit is presented in Exhibit II. We did not audit 

the United States Mint’s response and, accordingly, we express no opinion on it. 

We noted certain additional matters that we have reported to management of the United States Mint in a separate 

letter dated December 2, 2011. 

This report is intended solely for the information and use of the United States Mint’s management, the Department 

of the Treasury’s Office of Inspector General, OMB, the U.S. Government Accountability Office, and the U.S. 

Congress and is not intended to be and should not be used by anyone other than these specified parties. 

December 2, 2011
	

50
 
 

Exhibit I 

THE UNITED STATES MINT 

Significant Deficiency
	

September 30, 2011
	

Improvements Needed Over Inventory 

We noted the United States Mint did not fully recognize the cost of goods sold for the 2008 American Buffalo 

Celebration Coin which were sold in fiscal years 2008 and 2009. For this program, the Mint recognized the revenue 

for all units sold; however, the Mint did not recognize the cost of all units. The cost of approximately $15.5 million 

for the units not recognized remained on the Headquarter’s general ledger as work-in-process inventory, although 

the actual units of inventory were sold and delivered. Also an annual physical inventory was not conducted 

at Headquarters. 

OMB Circular No. A-123, Management’s Responsibility for Internal Control, (revised December 31, 2004), Section 

II, Subsection C, Paragraph 1, states that control activities include policies, procedures and mechanisms in place to 

help ensure that agency objectives are met. Several examples include: proper segregation of duties (separate personnel 

with authority to authorize a transaction, process the transaction, and review the transaction); physical controls over 

assets (limited access to inventories or equipment); proper authorization; and appropriate documentation and access 

to documentation. 

The United States Mint’s Standard Operating Procedures (SOP), titled Counting Inventory, states that Headquarters 

[is to conduct] an Annual Physical Inventory for inventory under their control. 

The United States Mint recorded an adjusting entry in fiscal year 2011 to properly account for this issue. 

Recommendation: We recommend United States Mint management follow the Counting Inventory SOP, and require 

at least an annual physical inventory held at Headquarters. 

51
 
December 2, 2011 

KPMG LLP 

2001 M Street N.W. 

Washington, DC 20036 

Ladies and Gentlemen: 

We have reviewed the fiscal year 2011 auditors’ report and are in substantial agreement with the reported 

observations. The United States Mint recognizes the need for strong internal controls and is taking corrective 

actions to address the noted deficiencies. We have made significant progress toward resolving the reported 

issues and will continue to work with KPMG and the Office of Inspector General in identifying the specific 

actions that will ensure we have taken appropriate corrective action. 

Sincerely, 

David Motl 

Acting Associate Director/Chief Financial Officer 

United States Mint 

52
 
Independent Auditors’ Report on Compliance and Other Matters
	

Inspector General 

United States Department of the Treasury 

Deputy Director 

United States Mint: 

We have audited the balance sheets of the United States Mint as of September 30, 2011 and 2010, and the 

related statements of net cost, changes in net position, and combined statements of budgetary resources 

(hereinafter referred to as “financial statements”) for the years then ended, and have issued our report 

thereon dated December 2, 2011. 

We conducted our audits in accordance with auditing standards generally accepted in the United States of 

America; the standards applicable to financial audits contained in Government Auditing Standards, issued 

by the Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin 

No. 07-04, Audit Requirements for Federal Financial Statements, as amended. Those standards and OMB 

Bulletin No. 07-04 require that we plan and perform the audit to obtain reasonable assurance about whether 

the financial statements are free of material misstatement. 

The management of the United States Mint is responsible for complying with laws, regulations, and 

contracts applicable to the United States Mint. As part of obtaining reasonable assurance about whether 

the United States Mint’s financial statements are free of material misstatement, we performed tests of the 

United States Mint’s compliance with certain provisions of laws, regulations, and contracts, noncompliance 

with which could have a direct and material effect on the determination of the financial statement amounts, 

and certain provisions of other laws and regulations specified in OMB Bulletin No. 07-04, including the 

provisions referred to in Section 803(a) of the Federal Financial Management Improvement Act of 1996 

(FFMIA). We limited our tests of compliance to the provisions described in the preceding sentence, and 

we did not test compliance with all laws, regulations, and contracts applicable to the United States Mint. 

However, providing an opinion on compliance with those provisions was not an objective of our audit, and 

accordingly, we do not express such an opinion. 

The results of our tests of compliance described in the preceding paragraph of this report, exclusive of those 

referred to in FFMIA, disclosed no instances of noncompliance or other matters that are required to be 

reported herein under Government Auditing Standards or OMB Bulletin No. 07-04. 

53
 
The results of our tests of FFMIA disclosed no instances in which the United States Mint’s financial management 

systems did not substantially comply with the (1) Federal financial management systems requirements, (2) applicable 

Federal accounting standards, and (3) the United States Government Standard General Ledger at the transaction level. 

This report is intended solely for the information and use of the United States Mint’s management, the Department of 

the Treasury’s Office of Inspector General, OMB, the U.S. Government Accountability Office, and the U.S. Congress 

and is not intended to be and should not be used by anyone other than these specified parties. 

December 2, 2011
	

54
 
APPENDIX I: FY 2011 COIN AND MEDAL PRODUCTS
 

2011 SEPTEMBER 11 NATIONAL MEDAL 

Medal Released: June 20, 2011 (first shipments Sept. 1, 2011) 

Mintage Limit: 2 million silver medals 

Description: The 2011 September 11 National Medal was authorized by 

the “National September 11 Memorial and Museum Commemorative Medal 

Act,” signed into law on Aug. 6, 2010. It commemorates the 10th anniversary 

of the terrorist attacks on the United States and the establishment of the 

National September 11 Memorial and Museum at the World Trade Center. 

2011 UNITED STATES ARMY COMMEMORATIVE 

COIN PROGRAM 

Coins Released: Jan. 31, 2011 (first shipments Feb. 28, 2011) 

Mintage Limits: 100,000 gold, 500,000 silver, 750,000 clad 

Description: The “United States Army Commemorative Coin Act,” signed 

into law on Dec. 1, 2008, commemorates the founding of the United States 

Army. Each coin design shows different aspects and eras of Army service. 

2011 MEDAL OF HONOR COMMEMORATIVE COIN PROGRAM 

Coins Released: Feb. 25, 2011 (first shipments April 25, 2011) 

Mintage Limits: 100,000 gold, 500,000 silver 

Description: The Medal of Honor Commemorative Coin Act of 2009 was 

signed into law on Nov. 6, 2009. It commemorates the 1861 establishment 

of the Medal of Honor, the highest award for valor in action against an 

enemy force that can be bestowed upon an individual serving in the 

U.S. Armed Forces. 

55
 
MOUNT HOOD NATIONAL FOREST QUARTER – OREGON 

Coin Released: Nov. 17, 2010 

Description: Established as a national site on Sept. 28, 1893, Mount Hood 

National Forest encompasses more than 1 million acres of mountains, 

lakes and streams. The reverse design features Mount Hood with Lost Lake 

in the foreground. 

GETTYSBURG NATIONAL MILITARY PARK QUARTER – 

PENNSYLVANIA 

Coin Released: Jan. 27, 2011 

Description: The Battle of Gettysburg was a turning point in the Civil War. 

The battlefield was established as a national site on Feb. 11, 1895. The 

reverse design depicts the 72nd Pennsylvania Infantry Monument, located 

on the battle line of the Union Army at Cemetery Ridge. 

GLACIER NATIONAL PARK QUARTER - MONTANA 

Coin Released: April 4, 2011 

Description: Established as a national reserve on Feb. 22, 1897, Glacier 

National Park is named for its prominent glacier-carved terrain and remnant 

glaciers descended from the ice age. The reverse design depicts a mountain 

goat climbing near the northeast slope of Mount Reynolds. 

OLYMPIC NATIONAL PARK QUARTER – WASHINGTON 

Coin Released: June 13, 2011 

Description: Established as a national site on Feb. 22, 1897, Olympic 

National Park protects more than 70 miles of Pacific Ocean beaches and 

Mount Olympus. The reverse design features a Roosevelt elk standing on a 

gravel river bar of the Hoh River with Mount Olympus in the background. 

VICKSBURG NATIONAL MILITARY PARK QUARTER – 

MISSISSIPPI 

Coin Released: Aug. 29, 2011 

Description: The Vicksburg National Military Park commemorates the 

battle of Vicksburg, Miss. The surrender of Vicksburg on July 4, 1863, 

coupled with the fall of Port Hudson, La., split the South, giving control 

of the Mississippi River to the North. Vicksburg was first established as a 

national site on Feb. 21, 1899. The reverse design depicts the U.S.S. Cairo 

on the Yazoo River as it was during the Civil War. 

56
 
ABRAHAM LINCOLN PRESIDENTIAL $1 COIN – 

16th PRESIDENT, 1861-1865 

Coin Released: Nov. 18, 2010 

Description: Abraham Lincoln served in the Illinois legislature and the 

U.S. House of Representatives before becoming President of the United 

States in 1861. While President, Lincoln issued the Emancipation 

Proclamation, which abolished slavery. On Nov. 19, 1863, he delivered 

the Gettysburg Address. On April 14, 1865, Lincoln was shot at Ford’s 

Theatre in Washington, D.C., and died the next morning. 

MARY TODD LINCOLN FIRST SPOUSE GOLD COIN 

AND BRONZE MEDAL – FIRST LADY, 1861-1865 

Coin and Medal Released: Dec. 2, 2010 

Description: Devoted to the military men stationed in Washington, D.C., 

during the Civil War, Mary Todd Lincoln and her husband made regular 

trips to encampments and local hospitals to visit the wounded and sick. The 

gold coin and bronze medal reverse design depicts Mrs. Lincoln bringing 

wounded Union soldiers flowers and books. 

ANDREW JOHNSON PRESIDENTIAL $1 COIN – 

17th PRESIDENT, 1865-1869 

Coin Released: Feb. 17, 2011 

Description: Andrew Johnson, a Democrat, was nominated by the 

Republican party for Vice President. After President Lincoln’s death, 

President Johnson proceeded with a moderate approach to Reconstruction. 

Radical Republicans in Congress, however, placed southern states under 

military rule. When Johnson allegedly violated the Tenure of Office Act, 

the House of Representatives voted 11 articles of impeachment against 

him. He was acquitted in the Senate by one vote. Johnson remained 

politically active, later serving in the Senate – the only former President 

to do so. 

ELIZA JOHNSON FIRST SPOUSE GOLD COIN 

AND BRONZE MEDAL – FIRST LADY, 1865-1869 

Coin and Medal Released: May 5, 2011 

Description: Eliza McCardle Johnson had a profound influence on the 

informal education of the future President, encouraging him to join in local 

debates to enhance his oratorical skills. During their final days in the White 

House, the Johnsons celebrated the President’s 60th birthday with a ball to 

which only children were invited. The medal reverse design depicts children 

dancing and a Marine Band fiddler playing at the children’s ball. 

57
 
ULYSSES S. GRANT PRESIDENTIAL $1 COIN – 

18th PRESIDENT, 1869-1877 

Coin Released: May 19, 2011 

Description: Ulysses S. Grant was appointed general-in-chief of the Union 

Army in March 1864. Grant was the Republican Party’s choice for President 

in 1868. As President, he allowed radical Reconstruction to run its course in 

the South. Under his administration, Yellowstone was established as the first 

national park, and Congress passed a bill calling for equal pay for women 

and men holding similar jobs in federal government agencies. 

JULIA GRANT FIRST SPOUSE GOLD COIN 

AND BRONZE MEDAL – FIRST LADY 1869-1877 

Coin and Medal Released: June 23, 2011 

Description: During the Civil War, Julia Dent Grant moved her home often 

to be close to her husband while he commanded the Union forces. The 

medal reverse design captures the courtship of a young Julia Dent and 

Ulysses S. Grant as they ride horses at her family’s plantation, White Haven. 

RUTHERFORD B. HAYES PRESIDENTIAL $1 COIN – 

19th PRESIDENT, 1877-1881 

Coin Released: Aug. 18, 2011 

Description: Rutherford B. Hayes fought in the Civil War and was wounded 

in action. While still in the Army, he was elected to serve in the House of 

Representatives. Later, he served three terms as Ohio governor. By 1876, 

he was the Republican candidate for President, winning by one vote in the 

Electoral College despite losing the national popular vote. Hayes announced 

in advance that he would serve only one term, and he retired to Ohio in 1881. 

LUCY HAYES FIRST SPOUSE GOLD COIN 

AND BRONZE MEDAL – FIRST LADY, 1877-1881 

Coin and Medal Released: Sept. 1, 2011 

Description: In 1878, President and Mrs. Hayes began the tradition of 

hosting the Easter Egg Roll on the White House grounds after learning the 

popular event would no longer be allowed to take place on U.S. Capitol 

Building grounds. The reverse design depicts Lucy Hayes’s participation 

in the first Easter Egg Roll held at the White House. 

58
 
2011 AMERICAN EAGLE PLATINUM PROOF COIN – TO INSURE 

DOMESTIC TRANQUILITY 

Coin Released: May 26, 2011 

Description: In 2009, the Mint introduced a new six-year platinum proof 

coin program highlighting the Preamble to the U.S. Constitution. In 2011, 

“To Insure Domestic Tranquility” was released. The reverse design features 

the harvest goddess emerging from a field of wheat. She carries a stalk of 

wheat in her left hand, and extends her right hand to a dove, representing 

the fulfillment of tranquility. Designs for all six coins in this program are 

inspired by narratives prepared by the Chief Justice of the United States on 

the six principles embodied in the Preamble. 

2011 NATIVE AMERICAN $1 COIN 

Coin Released: Jan. 1, 2011 

Description: The theme for the 2011 Native American $1 Coin is “Supreme 

Sachem Ousamequin, Massasoit of the Great Wampanoag Nation Creates 

Alliance with Settlers at Plymouth Bay (1621).” In 1621, Ousamequin, the 

Massasoit (a title meaning head chief) of the Wampanoag Indians, made a 

formal treaty with the English who settled in Plymouth, Mass. The reverse 

design features the Supreme Sachem Ousamequin Massasoit and Governor 

John Carver, symbolically offering the ceremonial peace pipe. 

59
 
60
 

Connecting America through Coins
	

www.usmint.gov