The United States Mint recently released their annual report, detailing their financial results for the 2009 fiscal year ended September 30, 2009. Despite achieving record revenue of $2.9 billion, total seigniorage and net income declined by 37.8% from the prior year.
The United States Mint operates under the Public Enterprise Fund, which enables them to operate without an appropriation. The US Mint generates revenue through the sale of circulating coins to Federal Reserve Banks, the sale of bullion coins to authorized purchasers, and the sale of numismatic products to the public. Money in excess of anticipated needs is transferred to the Treasury General Fund.
During fiscal year 2009, the US Mint’s overall revenue generated across circulating coins, bullion coins, and numismatic products rose to a record $2.91 billion, up from $2.8 billion in the last fiscal year. The increase in overall revenue was driven by a 78.6% surge in bullion program sales, which offset declines in the other categories.
Total seigniorage and net income fell to $501.6 million, representing a decline of 37.8% from the prior year. The decline was driven by the shift in volume from higher margin circulating coins and numismatic products to lower margin bullion coins. The US Mint transferred $475 million to the Treasury General Fund, compared to $750 million in the prior year.
The United States Mint Director Edmund Moy cited the severity and rapidity of the recession as a factor in the year’s results, affecting all three segments of their operations.
The decreased demand for circulating coins resulted in a production decline to a 45 year low. The total dollar value of circulating coins shipped to the Federal Reserve was $777.6 million, down from $1,294.5 million in the prior year. Fewer cash transactions and Americans cashing in their coins kept demand for new coins low. The decreased volume of coins produced was partially offset by the higher seigniorage margins achieved as a result of lower metal costs and the increased proportion of dollar coins minted.
Related article: Circulating Coin Shipments Fall 48.8%
Bullion sales reached $1.7 billion in 2009, representing more than half of the US Mint’s overall revenue. Because the purpose of the program is to make precious metals available to the public at minimal cost to investors, the margin for the bullion program is substantially lower than the US Mint’s other products. As such, the record sales did not contribute much to the bottom line.
Related article: Bullion Products Revenue Rises to $1.7 Billion
Sales through the numismatic program declined by 21.4% from the prior year to $414.6 million. Numismatic sales of circulating coins also showed a decline of 14.2%. The report cited the demand for bullion coins as the reason for the decline in numismatic sales. The US Mint did not offer certain numismatic products struck in precious metals, as they were legally required to meet the public demand for bullion coins before they could offer these products.
Related article: Numismatic Revenue Falls 21%
A series of future articles will examine circulating coinage, bullion sales, and numismatic products sales and results in more depth.
Value of United States Mint Sales
|(dollar in millions)||FY 2009||FY 2008||Change|
|Circulating Coins||$ 777.6||$ 1,294.5||(39.93%)|
|Numismatic Sale of Circulating Coins||$ 25.4||$ 29.6||(14.19%)|
|Bullion Program||$ 1,694.8||$ 948.8||78.63%|
|Numismatic Program||$ 414.6||$ 527.6||(21.42%)|
|Total||$ 2,912.4||$ 2,800.5||4.00%|
United States Mint Seigniorage and Net Income
|Seigniorage and Net Income||FY 2009||FY 2008||Change|
|Circulating Seigniorage||$ 427.8||$ 706.2||(39.42%)|
|Numismatic Seigniorage||$ 19.3||$ 22.5||(14.22%)|
|Bullion Program Net Income||$ 32.7||$ 17.8||83.71%|
|Numismatic Program Net Income||$ 21.8||$ 59.9||(63.61%)|
|Total||$ 501.6||$ 806.4||(37.80%)|