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Annual Reports: 2001: Financial Review
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During 2001, the Colonial Williamsburg Foundation completed a number
of key strategic initiatives, including the renovation of, and addition
to, the Visitor Center, construction of the three-hundred-room Woodlands
Hotel & Suites, renovation of the Williamsburg Inn and Kimball
Theatre, and demolition of the East Wing of the Williamsburg Lodge.
Colonial Williamsburg also completed in December 2001 an initiative
started in 1999 to improve the salary and wage rates for Foundation
employees, particularly those who work in the Historic Area. As
a result of a series of supplemental adjustments and merit awards,
the average increase in annual salaries and hourly wage rates was
substantially above increases in the cost of living for the almost
thirteen hundred employees who were eligible to participate in the
program for the full three-year period. |
Colleen Hoffman, sales interpreter
at the Historic Area's Colonial Nursery,
elists the aid of young visitors with
watering the garden. |
These improvements in facilities and in compensation were made to enhance
the experience of our visitors and guests and to recognize the important
contribution of Foundation staff to our mission.
The Foundation’s Board of Trustees approved a 2001 budget that
incorporated an operating deficit of $37.8 million. It was anticipated
that the new Woodlands facility and the Inn would open in July and September,
respectively, and that staff necessary to manage and operate those buildings
would be employed elsewhere in Colonial Williamsburg’s hospitality
segment during the construction period, when the revenue stream would
be much lower. In addition, staffing levels were budgeted to increase
in 2001 to improve Historic Area programming, educational outreach, and
the effectiveness of the Foundation’s administrative functions.
Members of Colonial Williamsburg's
renowned
Fifes and Drums perform a tune for a guest. |
Actual results for the year were $1.1 million better
than budget. A revenue shortfall of $9.4 million that resulted from
the slowing economy and the tragic events of September 11 was offset
by expenditure savings of $10.5 million, primarily as a result of
lower-than-budgeted staffing levels and lower cost of sales and interest
expense. Admissions and programs revenue achieved budgeted levels
but fell 3 percent short of the prior year due to the inclusion of
some evening programs in the annual pass to improve the visitor experience.
Revenues from hospitality, products, and commercial real estate were
$10.7 million less than budget, while unrestricted gifts were $800,000
more than budget and 10 percent above 2000. |
Colonial Williamsburg’s endowment increased by $82.4 million as
a result of the transfer of assets from the DeWitt Wallace Fund for Colonial
Williamsburg to the Foundation and successful fundraising, offset in part
by realized and amortized depreciation in the market value of endowment
assets. The DeWitt Wallace Fund for Colonial Williamsburg was an independent,
not-for-profit organization established to support the operation and maintenance
of the Foundation’s DeWitt Wallace Decorative Arts Museum and certain
other Foundation activities. During the summer of 2001, the Wallace Fund
total of $151.5 million, including 2.1 million shares of Reader’s
Digest stock, was transferred to Colonial Williamsburg’s control
and the Fund was dissolved. For the year, the combined assets of the Foundation’s
endowment and the Wallace Fund produced a total return of negative 8 percent,
which was approximately 4 percentage points better than the return of
the Standard & Poor’s 500 Index. The Foundation’s holding
of Reader’s Digest stock accounted for 3.7 percentage points of
the negative 8 percent return.
Overall debt balances grew during 2001 by $65 million, from $150 million
to $215 million, to fund the Visitor Center improvements, construction
of the new Woodlands Hotel & Suites, renovation of the Williamsburg
Inn, planned preservation initiatives, and other ongoing capital needs.
During the year, management and the Boards of the
Colonial Williamsburg Foundation and the Colonial Williamsburg Company
began to refine the Foundation’s long-term financial plan
to achieve financial equilibrium. The key elements of financial
equilibrium for Colonial Williamsburg are a balanced budget, preservation
of the value of facilities and collections, and preservation of
the purchasing power of the endowment. An additional key element
is providing compensation levels and a work environment that will
attract and retain the most able employees. Substantial progress
has been made on the last three elements. However, that progress
has put pressure on the budget in the short term and will continue
to do so for the next several years.
|
Father and son enjoy activities
along
Duke of Gloucester Street just outside the
Greenhow Store. Family-friendly activities
can be found throught the Historic Area. |
In an extraordinarily challenging year the Foundation’s ability
to increase the number of visitors and donors to the Annual Fund confirms
that Colonial Williamsburg’s message continues to be relevant and
powerful. The challenge is to refine the scope of the Foundation’s
programs, to maximize the benefit of recent investments in facilities,
and to continue to attract substantial philanthropic support. The critical
elements are in place to achieve those objectives and to attain financial
equilibrium.
The Colonial Williamsburg Foundation and
Subsidiary
Consolidated Statement of Financial Position
For the Years Ended December 31, 2001 and 2000
($ in Millions)
| Assets |
2001 Actual |
2001 Budget |
2000 Actual |
| Current assets: |
| Cash and temporary investments |
$28.2 |
$22.5 |
$45.3 |
| Receivables |
9.1 |
8.2 |
13.2 |
| Inventories and prepaid expenses |
15.5 |
16.8 |
16.7 |
| Total current assets |
52.8 |
47.5 |
75.2 |
| Noncurrent assets: |
| Fixed assets |
362.0 |
382.1 |
294.2 |
| Endowment |
673.8 |
629.1 |
591.4 |
| Contributions receivable |
14.1 |
15.7 |
10.9 |
| Split interest agreements |
14.4 |
14.8 |
14.8 |
| Other assets |
17.1 |
17.3 |
12.5 |
| Total assets |
$1,134.2 |
$1,106.5 |
$999.0 |
| Liabilities And Net Assets |
| Current liabilities: |
| Accounts payable and accrued expenses |
$24.1 |
$22.1 |
$22.5 |
| Current debt |
20.0 |
20.0 |
20.0 |
| Deferred income |
3.0 |
2.8 |
3.0 |
| Total current liabilities |
47.1 |
44.9 |
45.5 |
| Noncurrent liabilities: |
| Long-term debt* |
195.4 |
229.7 |
129.7 |
| Split interest agreements |
8.5 |
8.5 |
8.5 |
| Other liabilities |
30.2 |
31.1 |
30.0 |
| Total liabilities |
281.2 |
314.2 |
213.7 |
| Total net assets |
853.0 |
792.3 |
785.3 |
| Total liabilities and net assets |
$1,134.2 |
$1,106.5 |
$999.0 |
The Colonial Williamsburg Foundation and
Subsidiary
Summary of Operating Results and Change in Net Assets
For the Years Ended December 31, 2001 and 2000
($ in Millions)
| Operating Revenues |
2001 Actual |
2001 Budget |
2000 Actual* |
| Admissions and Programs |
$29.6 |
$29.6 |
$30.5 |
| Hotels and Restauruants |
61.8 |
65.5 |
71.1 |
| Products |
40.7 |
47.3 |
41.2 |
| Real Estate |
6.4 |
6.8 |
5.7 |
Revenues from operations |
138.5 |
149.2 |
148.5 |
| Unrestricted gifts |
10.8 |
10.0 |
9.8 |
| Gifts restricted for operations |
10.4 |
9.9 |
10.3 |
| Investment income available for operations |
25.1 |
25.1 |
20.3 |
| Total Revenues |
184.8 |
194.2 |
188.9 |
| Operating Expenses |
| Payroll and related |
101.3 |
109.4 |
95.2 |
| Cost of sales |
27.5 |
29.5 |
27.9 |
| Depreciation |
12.0 |
11.7 |
12.1 |
| Other expenses |
80.7 |
81.4 |
72.5 |
| Total expenses |
221.5 |
232.0 |
207.7 |
| Operating Deficit |
(36.7) |
(37.8) |
(18.8) |
| Nonoperating Revenues
and Expenses |
| Gifts for endowment or capital projects |
169.1** |
N/A |
25.7 |
| Other |
11.5 |
N/A |
0.9 |
| Investment income and realized and unrealized gains
retained in endowment and reserves |
(76.2) |
N/A |
8.4 |
| Change in net assets |
$67.7 |
N/A |
$16.2 |
*Cerain revenues and expenses have been reclassified in the 2000
statements to conform with classifications adopted for 2001.
**Includes $151.5 million of assets transfered from the DeWitt Wallace
Fund for Colonial Williamsburg.
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