Report of the Treasurer to the Council for the Year Ended December 31, 2006 (2007) / Chapter Skim
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III. Financial Condition
III. Financial Condition
Pages 37-54
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From page 37... ...
III. Financial Condition 37
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From page 38... ...
Cicerone: In accordance with Bylaw V–6 of the National Academy of Sciences, the firm of KPMG, LLP was retained to conduct an audit of the accounts of the Treasurer for the year ended December 31, 2006, and to report to the Auditing Committee. The independent accountants have completed their audit of the financial statements and have submitted their report, a copy of which is attached, concerning financial statements to which they refer.
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From page 39... ...
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 NAS as of December 31, 2006 and 2005, and its changes in net assets and its cash flows for the years then ended in conformity with U.S.
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From page 40... ...
38,017 38,219 Property and equipment, net (note 4) 135,415 132,623 Einstein Memorial 1,723 1,723 $ 727,884 $ 670,849 Liabilities and Net Assets Liabilities: Current liabilities: Accounts payable and accrued expenses $ 32,262 $ 28,397 Deferred revenue (note 6)
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From page 41... ...
: Programs (note 10) 221,656 - - 221,656 223,531 - - 223,531 Management and general 41,154 - - 41,154 40,211 - - 40,211 Fundraising 2,559 - - 2,559 2,329 - - 2,329 Total expenses 265,369 - - 265,369 266,071 - - 266,071 Change in net assets 51,071 15,594 3,453 70,118 9,001 19,570 8,210 36,781 Net assets at beginning of the year 129,498 190,844 105,837 426,179 120,497 171,274 97,627 389,398 Net assets at end of the year $ 180,569 206,438 109,290 496,297 $ 129,498 190,844 105,837 426,179 See accompanying notes to financial statements.
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From page 42... ...
778 Net increase (decrease) in cash and cash equivalents 142 205 Cash and cash equivalents, beginning of year 3,640 3,435 Cash and cash equivalents, end of year $ 3,782 $ 3,640 Supplemental disclosure of cash flow information: Interest paid $ 6,019 $ 5,772 See accompanying notes to financial statements.
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From page 43... ...
The financial position and results of TNAC are activities: not consolidated in the NAS financial statements. NAS utilized the Beckman Center for meetings in 2006 and • Division of Behavioral and Social Sciences and 2005, for which NAS paid $286,000 and $275,000, Education respectively.
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From page 44... ...
Federal methods and assumptions used in determining the fair sponsors individually providing more than 10% of NAS value of the alternative investments. revenues are summarized below: Percentage of Investments in real estate mortgages are recorded at cost, NAS revenues which approximates fair value, and consist of mortgages Federal agency sponsor 2006 2005 on certain administrative facilities that NAS occupies.
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From page 45... ...
Bonds and notes 23,540 21,715 Current market pricing models are used to estimate fair Equity securities 14,605 17,922 values of interest rate swap agreements. The fair market Total short-term investments $ 45,785 $ 48,609 value of all other financial instruments in the financial statements approximates their reported carrying values.
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From page 46... ...
: As of December 31, 2006 and 2005, respectively, NAS held alternative investments with fair values of approxi- Years ending December 31 mately $82.8 million and $53.6 million. These fair values 2007 $ 11,119 were estimated by the general partners of these invest- 2008 4,500 ment funds in the absence of readily ascertainable values 2009 3,355 at those dates.
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From page 47... ...
$104,177 $100,725 Sponsored research and advisory programs NAS has a cumulative net underrecovery of approxi Prizes and awards 5,113 5,112 mately $2.4 million and $4.3 million as of December 31, 2006 and 2005, respectively, which is included in the $109,290 $105,837 Total permanently restricted net assets contracts receivable balance in the statements of financial position.
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From page 48... ...
the fair value of a derivative contract is positive, the counterparty owes NAS, which creates credit risk for The term bonds maturing on January 1, 2019, and January NAS. When the fair value of a derivative contract is 1, 2028, are subject to mandatory redemption by opera negative, NAS owes the counterparty, and therefore, it tion of sinking fund installments.
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From page 49... ...
NOTE PAYABLE (c) Postretirement and Postemployment Benefits At December 31, 2005, NAS had a loan agreement of $10 NAS provides certain health and life insurance benefits million with Bank of America, with a maturity date of for employees retired due to length of service.
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From page 50... ...
The accrued postretirement benefit obligation is reported in accrued employee benefits on the statements of financial position. 2006 2005 Life Life insurance insurance Health Health benefits benefits Total benefits benefits Total Change in benefits obligations: Benefit obligation, January 1 $ 811 $ 13,719 $ 14,530 $ 814 $ 15,379 $ 16,193 Service cost 14 664 678 13 671 684 Interest cost 45 772 817 45 864 909 Plan participant contributions - (104)
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From page 51... ...
The assumptions used to calculate the accumulated The following benefit payments, which reflect future postretirement benefit obligation for the years ended services, are expected to be paid, as of December 31, December 31, 2006 and 2005 are as follows: 2006 (dollars in thousands) : 2006 2005 Years ending December 31: Discount rate 5.75% 5.75% 2007 $ 787 2008 889 NAS postretirement benefit plan asset allocations at 2009 1,000 December 31, 2006 and 2005, by asset category are as 2010 1,052 follows: 2011 1,128 2012-2016 6,401 2006 2005 $ 11,257 Cash 5% 31% Bonds and notes 25% 15% Equity securities 70% 54% The measurement date of the plan assets and benefit obligations for 2006 and 2005 is December 31, 2006 and 100% 100% 2005, respectively.
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From page 52... ...
Management is of million and $2.25 million, respectively, and is included in the opinion that no material liability will result from other assets on the statement of financial position. future audits.
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From page 53... ...
Kan AUDITING COMMITTEE Jack Halpern, Chair Jerry P Gollub Gerald M
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