Report of the Treasurer for the Year Ended December 31, 2010 (2011) / Chapter Skim
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Notes to Financial Statements
Notes to Financial Statements
Pages 45-64
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From page 45... ...
IOM issues position statements on these policies, cooperates with the major scientific and Net assets, revenues, gains, and losses are classified based professional societies in the field, identifies qualified on the existence or absence of donor-imposed restrictions. individuals to serve on study groups in other organiza- Accordingly, net assets of NAS are classified and tional units, and disseminates information to the public reported as follows: and the relevant professions.
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From page 46... ...
(g) Inventories Gifts of land, buildings, or equipment are reported as unrestricted net assets unless explicit donor stipulations Inventories are stated at the lower of cost or net realizable specify how the donated assets must be used.
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From page 47... ...
2010 2009 (k) Recently Adopted Accounting Pronouncements Short-term investments: Cash equivalents $ 12,503 $ 8,990 Effective December 31, 2010, NAS applied the guidance Bonds and notes 31,666 29,561 in FASB Accounting Standards Update 2010-06, Fair Equity securities 12,608 10,562 Value Measurements and Disclosures – Improving Total short-term investments $ 56,777 $ 49,113 Disclosures about Fair Value Measurements, to its financial assets and liabilities disclosed at fair value.
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From page 48... ...
securities funds at December 31, 2010 and 2009, respectively. Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted NAS holds alternative investments, comprised of private prices in markets that are not active; or other inputs that equity securities and hedge funds, in its long-term are observable or can be corroborated by observable investment pool.
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From page 49... ...
The following table presents NAS' fair value hierarchy for those assets and liabilities measured at fair value on a Fair value of alternative investments including private recurring basis at December 31, 2010 (dollars equity securities and hedge funds is based on the alterna- in thousands) : tive investment fund managers' NAV.
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From page 50... ...
57,054 57,054 - Real estate stocks 11,938 11,938 - Hedge funds Fund of fund – multi-strategies 27,104 - 27,104 Multi-strategies/multi-vehicle 11,028 - - 11,028 Fixed income single strategy 1,185 - 1,185 Long/short equity 15,986 - 2,500 13,486 Private equity Asia 12,725 - - 12,725 Global 4,840 - - 4,840 Domestic 2,005 - - 2,005 Total short-term and long-term investments 479,839 373,806 61,949 44,084 Deposit with trustee Bonds and notes U.S. treasuries/government bonds 47,216 47,216 - Total deposit with trustee 47,216 47,216 Charitable gift annuity assets: Cash equivalents 56 56 - Bonds and notes U.S.
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From page 51... ...
48,439 48,439 - Real estate stocks 10,161 10,161 - Hedge funds Fund of fund – multi-strategies 34,255 - 34,255 Multi-strategies/multi-vehicle 10,000 - - 10,000 Fixed income single strategy 1,281 - - 1,281 Private equity Asia 4,990 - - 4,990 Global 5,073 - - 5,073 Domestic 1,972 - - 1,972 Total short-term and long-term investments 425,276 339,466 62,494 23,316 Charitable gift annuity assets: Cash equivalents 125 125 - Bonds and notes U.S treasuries/government bonds 55 55 - Mortgage-backed securities 452 452 - Corporate bonds 118 118 - Equity securities U.S. small/mid cap 1,631 1,631 - Total charitable gift annuity assets 2,381 2,381 - Deferred compensation assets: Cash equivalents 24 24 - Bonds and notes U.S.
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From page 52... ...
December 2010 investments Purchases Sales 31, 2010 Hedge funds: Multi-strategies/multi-vehicle $ 10,000 $ 1,028 $ - $ - $ - $ 11,028 Fixed income single strategy 1,281 (96)
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From page 53... ...
Investments held in multi-vehicle hedge fund with the objective of maximiz- India primarily include equity securities of "early to early ing long-term, risk-adjusted returns and capital apprecia- growth stage" companies in multiple sectors, except real tion by investing in securities, investment funds, discre- estate. The fair values of these investments have been tionary accounts, and investment partnerships across a estimated using the NAV of NAS' ownership interest in broad range of marketable and alternative asset classes.
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From page 54... ...
: ranging from 3% to 6% and the allowance for uncollectible contributions was approximately $453,000. 2010 2009 Sponsored research and advisory programs $ 32,040 $ 30,788 General endowment 4,927 5,732 Prizes and awards 799 728 Woods Hole facility 372 390 Total temporarily restricted net assets $ 38,138 $ 37,638 released from restriction 54
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From page 55... ...
This is by the applicable donor gift instrument. The remaining consistent with NAS' objective to maintain the purchasportion of donor-restricted endowment funds that are not ing power of the endowment assets held in perpetuity as classified as permanently restricted are classified as well as to provide additional real growth through new temporarily restricted net assets until those amounts are gifts and investment return.
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From page 56... ...
At December 31, increase in unrestricted net assets. 2010, there were no endowment funds with a fair value below the original value of the gift.
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In June 2008, the District of Columbia issued Series (12) RECOVERY OF INDIRECT COSTS 2008A tax-exempt revenue bonds in the amount of $66,325,000 on behalf of NAS.
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From page 58... ...
Interest Rate Swaps interest rates ranging from 3.0% to 5.0%, maturing at various dates from In October 1999, NAS entered into a swap agreement, April 1, 2013 through 2030 29,385 with an effective date of February 1, 2000, relating to Series 2010A revenue bonds, term, 13,205 Interest rate 5%, maturing April 1, 2035 the $66 million face amount of its Series 1999A revenue Interest rate 5%, maturing April 1, 2040 16,960 bonds. The agreement provides for NAS to receive Total bonds, at face value 182,095 123,825 4.97% in interest on a notional amount of $65 million Plus unamortized premium 1,244 and to pay interest at a floating rate option based on the Total bonds payable 183,339 123,825 weekly interest rate resets of tax-exempt variable-rate Less current portion (included in other issues per the SIFMA Municipal Swap Index.
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From page 59... ...
of the Internal Revenue Code. Accordingly, with regard to the fixed-to-variable interest rate swap, NAS recorded a gain on the change In addition, NAS has a voluntary employee contribution in the fair value of its swap agreement of $17,000 for retirement plan that is funded solely by employee the year ended December 31, 2010 and a loss of contributions made on a pretax salary-reduction basis $902,000 for the year ended December 31, 2009, which under Section 403(b)
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From page 60... ...
: Net periodic benefit cost $ 891 $ 1,491 2010 2009 The assumptions used to determine net periodic benefit Net actuarial loss $ 4,365 $ 3,513 cost for years ended December 31, 2010 and 2009 are as Prior service cost 932 1,142 follows: Unrecognized net initial obligation 90 117 Total $ 5,387 $ 4,772 2010 2009 Discount rate 6.00% 6.00% Expected long-term return on plan assets 7.50% 7.50% The estimated amounts, measured at year-end, that are expected to be recognized in the net periodic benefit 60
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From page 61... ...
The Plan assets are invested with a long-term growth Fair value measurements strategy, with a 70% equity guideline. at December 31 using: Fair The overall long-term rate of return was developed by Value Level 1 Level 2 Level 3 estimating the long-term real rate of return for the Financial Assets: Plan's asset mix, while taking into account the effects of Retiree Welfare Benefit Plan investments: inflation.
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From page 62... ...
They 2019. The healthcare cost trend rate assumption has a each provide that the repayment obligation will be significant impact on the postretirement benefit costs adjusted to allocate to each party its proportional share and obligations.
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Management is of the opinion NAS has evaluated subsequent events from the balance that no material liability will result from such audits. sheet date through May 25, 2011, the date at which the financial statements were available to be issued, and determined that there are no other items to disclose.
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From page 64... ...
Graham Robert H Wurtz FINANCIAL MANAGEMENT STAFF Didi Salmon, Chief Financial Officer Craig Meyer, Controller 64
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