1,018 



459 



1,477 



$ 409,731 



997 

 624 



1.691 



379.254 

 439,184 



Nonpooled investments: 

 Deposit with U.S. Treasury 

 Charitable trusts 



Subtotal - nonpooled investments 



Total endowment and 

 similar funds 



Total investments 



(4) Endowment and Similar Funds 



The Institution uses the total return approach to investment management of 

 endowment funds and quasi-endowment funds. Each year, the endowment 

 pays out an amount for current expenditures based upon a number of factors 

 evaluated and approved by the Board of Regents. The payout for 1994 was 

 4.4 percent of the average market value of the endowment over the prior five 

 years. The difference between the income (i.e., dividends, interest and realized 

 capital gains) and the payout for the year is reinvested or withdrawn from 

 previously accumulated returns. Actual income exceeded the payout amount 

 in fiscal year 1994 and the excess was transferred from current funds to the 

 endowment and similar funds (see note 12). 



Substantially all of the investments of the endowment and similar funds are 

 pooled on a market value basis, with each individual fund subscribing to or 

 disposing of units on the basis of the per unit market value at the beginning 

 of the month within which the transaction takes place. At September 30, 

 1994, each unit had a market value of $425. The market value of the pool's 

 net assets at September 30, 1994 was $378,033,000, representing all pooled 

 investments (see note 3) plus net receivables and payables related to invest- 

 ment transactions. 



Each fund participating in the investment pool receives an annual payout 

 equal to the number of units owned times the annual payout amount per 

 unit. The payout for fiscal year 1994 was $16.00 per unit. Based on approved 

 Board policy, if the market value of any endowment fund is less than 110 per- 

 cent of the historical value, the current payout is limited to the actual interest 

 and dividends allocable to that fund. 



Fund balances of the endowment and similar funds are comprised of the 

 following at September 30, 1994: 



Linus ( $000s ) 



Endowment - unrestricted 

 Endowment - restricted 

 Quasi-endowment - unrestricted 

 Quasi-endowment - restricted 



( S) Receivables and Advance Payments 



Trust fund receivables at September 30, 1994 comprised the following: 



23,405 



$ 9,147 



326,068 



124,964 



367,233 



145,670 



173.414 



6S.44" 



890,120 



$ 348,228 



Auxiliary activities and other, 

 net of $1,528 allowance for 

 doubtful accounts 



Investment securities sold 



Pledges receivable 



Grants and contracts 



Interest and dividends receivable 



Interfund receivables and other 



( $000s ) 



19,001 

 7,413 

 6,845 

 6,646 

 3,442 

 19.208 

 62.555 



Advance payments of $10,210,000 represent prepayments made to govern- 

 ment agencies, educational institutions, firms and individuals for services to 

 be rendered, or property or materials to be furnished. 



At September 30, 1994, the Institution had advance payments outstanding 

 to the General Services Administration of $5,331,000, principally for equip- 



ment purchases for the Museum Support Center and other projects to be 

 completed in future fiscal years. Advance payments outstanding to educa- 

 tional institutions amounting to $2,556,000 were principally under the Spe- 

 cial Foreign Currency Program. Other advance payments totaled $2,323,000. 



(6) Property and Equipment 



($000s) 







Trust fund: 





Federal 







Current 



Plant 









funds 



funds 



Totals 



funds 



Totals 



Land 



$ 



2,565 



2,565 



- 



2,565 



Buildings 



4,125 



83,452 



87,577 



297,986 



385,563 



Capital 













improvements 



26,484 



- 



26,484 



302,034 



328,518 



Equipment 



11,842 



7,482 



19,324 



50,115 



69,439 



Leasehold 













improvements 



1.543 



_ 



1.543 



_ 



1.543 





43,994 



93,499 



137,493 



650,135 



787,628 



Less - accumulated 













depreciation 



(22M2) 



(26JJL3.) 



148,245) (304.7701(353.015) 



Total 



$21,932 67,316 89,248 345,365 434,613 



Property use and depreciation expense in the federal funds for fiscal year 

 1994 included $31,670,000 of depreciation expense in the capital funds. 



Depreciation expense in the trust funds for fiscal year 1994 for income- 

 producing assets amounted to $2,103,000 and is included in auxiliary activi- 

 ties expenditures in the current funds. Depreciation for nonincome-producing 

 equipment and buildings for fiscal year 1994 amounted to $2,589,000 and is 

 included In the plant funds. 



At September 30, 1994, the fund balance of the trust plant funds included 

 $15,669,000 of restricted funds and $793,000 of unrestricted funds desig- 

 nated for future plant acquisitions. 



(7) Commitments and Contingencies 



(a) Leasing Activities 



Leases for various Smithsonian warehouse and office spaces provide for esca- 

 lation of rents to coincide with increases in property taxes, operating ex- 

 penses attributable to the leased property and the Consumer Price Index. The 

 Institution has the authority to enter into leases for up to 30 years using fed- 

 eral funds. 



The Institution's operating leases for the warehouse and office spaces re- 

 quire future minimum lease payments as follows: 





($000s) 



1995 



$ 9,429 



1996 



6,344 



1997 



5,496 



1998 



4,916 



1999 



3,841 



Thereafter 



10.297 





$ 40,323 



Rental expense for these real property leases totaled $10,559,000 for fiscal 

 year 1994. 



lb) Government Grants and Contracts 



The Institution receives funding or reimbursement from governmental agen- 

 cies for various activities which are subiect to audit. Audits of these activities 

 have been completed through the fiscal year 1993. However, audits of fiscal 

 years 1992 and 1993 have not been finalized with the cognizant agency. 

 Management believes that any adjustments which may result from those 



338 



