The discount rate used to determine the APBO was 8.25 percent. A 10 per- 

 cent health care cost trend rate was assumed for fiscal year 1994 with this 

 rate decreasing .5 percent each year to an ultimate rate of 5 percent in fiscal 

 year 2005 and thereafter. If the assumed health care cost trend rate was in- 

 creased by 1 percentage point in each year, the net periodic postretirement 

 benefit cost would be higher by $167,000 and the APBO higher by $887,000 

 as of September 30, 1994. 



described in that section are taxable only on their unrelated business income. 

 No provision for income taxes is required for fiscal year 1994. 



It is the opinion of the Institution's management that it is also exempt from 

 taxation as an instrumentality of the United States as defined in Section 

 501(c)(1) of the Code. Organizations described in that section are exempt 

 from all income taxation. The Institution has not yet formally sought such 

 dual status. 



(13) Voluntary Separation Costs 



During fiscal year 1994, the Institution announced the Voluntary Separation 

 Incentive Program. This program was offered to meet employee restructuring 

 requirements of the Federal Workforce Restructuring Act. The Institution ac- 

 cepted 209 federal funds employees and 23 trust funds employees into the 

 program. Voluntary separation costs totaling $5,109,000 and $434,000 were 

 recorded to the federal and trust funds, respectively. The deficiency of rev- 

 enue and other additions over expenditures and other deductions of the fed- 

 eral operating funds resulted primarily from this transaction. 



(IS) Current Trust Funds Financial Activity 



Current unrestricted funds are comprised of three distinct subfunds. These 

 subfunds include the auxiliary activities fund that represents primarily the 

 revenue and expenditures of the Smithsonian Associates, Smithsonian and Air 

 & Space/Smithsonian magazines, and museum shop and mail order sales. The 

 special purpose fund represents funds internally designated for specific pur- 

 poses and the general purpose fund consists of all other unrestricted activity 

 in the current funds. 



(14) Income Taxes 



The Institution is exempt from income taxation under the provisions of 

 Section 501(c)(3) of the Internal Revenue Code (the Code). Organizations 



The financial activity for the current trust funds by subfund for fiscal year 1994 is as follows: 



($000s) 





Unrestricted 









General 



Auxiliary 



Special 







purpose 



activities 



purpose 



Total 



Restricted 



Totals 



$ 









45,701 



45,701 



8,758 



- 



849 



9,607 



8,661 



18,268 



(103) 



- 



- 



(103) 



- 



(103) 



58 



8,901 



889 



9,848 



22,327 



32,175 



326 



- 



4,938 



5,264 



3,683 



8,947 



- 



183.843 



13.390 



197.233 



_ 



197.233 



9.039 



192.744 



20.066 



221.849 



80.372 



2Q2221 



10,698 





16,570 



27,268 



62,863 



90,131 



9,954 



8,153 



818 



18,925 



8,746 



27,671 



1,094 



- 



495 



1,589 



6 



1,595 



_ 



164.962 

 173.115 



8,861 



26.744 



173.823 

 121M1 



_ 



173.823 



21.746 



71.615 



222J2Q 



(12,707) 



19,629 



(6,678) 



244 



8,757 



9,001 



iiiii 



(19.629) 



6.671 



575 



(6.343) 



(5.768) 



$ 826 



- 



(7) 



819 



2.414 



3,233 



Revenue and other additions: 

 Government grants and contracts 

 Investment income 

 Net gain (loss) on sale of securities 

 Gifts, bequests and private grants 

 Rentals, fees, and commissions 

 Auxiliary activities 



Total revenue and other additions 



Expenditures and other deductions: 

 Research, educational and 



collection acquisition 

 Administration 

 Facilities services 

 Auxiliary activities 



Total expenditures and other deductions 



Excess of revenue and other additions over 

 (under) expenditures and other deductions 



Transfers among funds 



Net increase (decrease) for the year 



34O 



