Report of the Treasurer to the Council for the Year Ended December 31, 2005 (2006) / Chapter Skim
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III. Financial Condition
III. Financial Condition
Pages 39-56
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From page 39... ...
III. Financial Condition 39
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From page 40... ...
Cicerone: In accordance with Bylaw V6 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, 2005, 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 41... ...
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, 2005 and 2004, 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 42... ...
3,257 8,667 Accrued employee benefits (note 14) 7,613 11,102 Total liabilities 244,670 253,766 Net assets: Unrestricted 129,498 120,497 Temporarily restricted (note 8)
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From page 43... ...
: Programs (note 10) 223,531 - - 223,531 214,165 - - 214,165 Management and general 40,211 - - 40,211 37,543 - - 37,543 Fundraising 2,329 - - 2,329 2,669 - - 2,699 Total expenses 266,071 - - 266,071 254,377 - - 254,377 Change in net assets 9,001 19,570 8,210 36,781 19,367 10,521 1,534 31,422 Net assets at beginning of the year 120,497 171,274 97,627 389,398 101,130 160,753 96,093 357,976 Net assets at end of the year $ 129,498 190,844 105,837 426,179 $ 120,497 171,274 97,627 389,398 See accompanying notes to financial statements.
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From page 44... ...
in cash and cash equivalents 205 (663) Cash and cash equivalents, beginning of year 3,435 4,098 Cash and cash equivalents, end of year $ 3,640 $ 3,435 Supplemental disclosure of cash flow information: Interest paid $ 5,772 $ 4,987 See accompanying notes to financial statements.
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From page 45... ...
The financial position and results of TNAC are not consolidated in the NAS financial statements. NAS · Division of Behavioral and Social Sciences and utilized the Beckman Center for meetings in 2005 and Education 2004, for which NAS paid $275,000 and $233,000, · Division on Earth and Life Studies respectively.
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From page 46... ...
The fair value of all debt and equity securities with a readily determinable fair Percentage of value are based on quotations obtained from national NAS revenues security exchanges. Alternative investments, consisting Federal agency sponsor 2005 2004 of hedge funds and private placement equities, which are Department of Transportation 26% 27% not readily marketable, are carried at estimated fair values National Aeronautics and Space Administra as provided by the investment managers.
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From page 47... ...
: $5.7 million and $5.4 million, respectively, to these 2005 2004 partnerships. Short-term investments: Cash equivalents $ 8,972 $ 6,689 As of December 31, 2005 and 2004, respectively, NAS Bonds and notes 21,715 32,429 held alternative investments with fair values of approxi Equity securities 17,922 14,186 mately $53.6 million and $35.1 million.
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From page 48... ...
: position, and mature as follows (dollars in thousands) : 2005 2004 Years ending December 31 Sponsored research and advisory programs $155,908 $139,865 2006 $ 8,333 Prizes and awards 31,410 28,275 2007 4,154 2008 3,261 Woods Hole facility 3,526 3,134 2009 3,294 Total temporarily restricted net assets $190,844 $171,274 2010 3,269 Thereafter 31,913 54,224 48
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From page 49... ...
If NAS underrecovers, a receivable is recorded. 2005 2004 NAS has a cumulative net underrecovery of approxi Sponsored research and advisory programs $102,447 $ 94,237 mately $4.3 million and $10.6 million as of December 31, Prizes and awards 3,390 3,390 2005 and 2004, respectively, which is included in the contracts receivable balance in the statements of financial Total permanently restricted net assets $105,837 $ 97,627 position.
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From page 50... ...
When The term bonds maturing on January 1, 2019, and January the fair value of a derivative contract is positive, the 1, 2028, are subject to mandatory redemption by opera- counterparty owes NAS, which creates credit risk for tion of sinking fund installments. The installment NAS.
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From page 51... ...
The current portion of this NAS provides certain health and life insurance benefits obligation is included within other current liabilities and for employees retired due to length of service. All the long-term portion is included within accrued lease benefit-eligible employees may become eligible for liability and deferred gain, respectively, in the statements service retiree benefits if they reach age 60 while working of financial position.
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From page 52... ...
Effective January components of net periodic benefit cost for the years 1, 2005, this plan was merged with the NAS postretire- ended December 31, 2005 and 2004 (dollars in thoument benefit plan and the effects of this merger and plan sands) : changes are reported in the 2005 and 2004 liability and 2005 2004 Life Life insurance Health insurance Health benefits benefits Total benefits benefits Total Change in benefits obligations: Benefit obligation, January 1 $ 814 $ 15,379 $ 16,193 $ 1,022 $ 18,411 $ 19,433 Service cost 13 671 684 68 972 1,040 Interest cost 45 864 909 58 1,079 1,137 Plan participants contributions - (130)
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From page 53... ...
The fund is diversified between fixed income and The effect of a 1% change in the assumed healthcare cost equity investments. With this diversification and invest- trend rate at December 31, 2004, would have resulted in ment in broader market funds, there is reasonable an estimated $1.9 million increase or $1.6 million assurance that no single security or class of securities will decrease in the postretirement benefit obligation and an have a disproportionate impact on the Plan assets.
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From page 54... ...
Contingencies Plan amendments effective January 1, 2005, the prescription drug benefits offered by the NAS coverage were NAS receives a portion of its revenues directly or determined to not be actuarially equivalent to Medicare indirectly from federal government grants and contracts, Plan D, and the effects of the Act, excluding the subsidy, all of which are subject to audit by the Defense Contract do not have a significant impact on the per capita claims Audit Agency, which has completed its examinations cost. It is anticipated that the prescription drug component through December 31, 2003.
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From page 55... ...
Wessler AUDITING COMMITTEE Jack Halpern, Chair Jerry P Gollub Gerald M
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