Financial Highlights: Balance Sheet and Statement of Changes in Net Position
A t the end of fiscal year 2004, the USPTO's consolidated Balance Sheet presents total assets of $1,297.3 million, total liabilities of $828.2 million, and a net position of $469.1 million.
Total assets increased 21.0 percent over the last four years, resulting largely from the increase in Fund Balance with Treasury. The following table shows the changes in assets during this period.
|Asset||FY 2001||FY 2002||FY 2003||FY 2004|
||$ 9.3||$ 11.4
|Fund Balance with Treasury||923.4||926.1||985.6||1,135.2|
|Property and Equipment, Net||128.6||119.2||117.4||137.3|
|Accounts Receivable and Prepayments|| 9.1
|Percentage Change in Total Assets||11.4%||2.1%||5.1%||12.7%|
Fund Balance with Treasury is the single largest asset on the Balance Sheet and represents 87.5 percent of total assets at the end of fiscal year 2004. This asset is comprised of unpaid obligated funds of $304.4 million, temporarily unavailable fees of $516.5 million, $233.5 million in surcharge fees, other funds that are held on deposit for customers of $78.5 million, and unobligated funds of $2.3 million.
The restricted funds and the temporarily unavailable funds require Congressional appropriation before they will be available for the USPTO's use. These funds, together with unobligated amounts and amounts already obligated, but not yet paid, represent 93.1 percent of the Fund Balance with Treasury.
The other major asset is property and equipment. While the net balance of this asset has increased by $8.7 million during the past four years, budgetary constraints have affected spending. Although the USPTO incurred $51.0 million for leasehold improvements at its consolidated headquarters in Alexandria, Virginia, significant amounts were not invested in other components of property and equipment. For example, while the overall acquisition value of IT equipment has decreased $0.8 million over the past four years, the overall acquisition value of IT software and software in development increased $52.2 million. These amounts illustrate how the USPTO has traded off spending in its IT equipment replacement program, falling behind planned computer and server replacement schedules, to enhance its existing IT e-Government capability in areas such as e-filing, application information retrieval, data and image capture, and web based search systems.
Total liabilities increased from $748.3 million at the end of fiscal year 2003 to $828.2 million at the end of fiscal year 2004, representing an increase of $79.9 million, or 10.7 percent. The following table shows the change in liabilities during the past four years.
|Liability||FY 2001||FY 2002||FY 2003||FY 2004|
|Accrued Payroll, Leave, and Benefits||80.7||68.0||75.4||83.4|
|Customer Deposit Accounts||57.5||64.8||74.4||70.7|
|Other Liabilities|| 19.8
|Percentage Change in Total Liabilities||11.4%||15.3%||9.3%||10.7%|
The USPTO's deferred revenue is the largest liability on the Balance Sheet. The liability for deferred revenue is derived from a detailed calculation based on the process for completing each service provided. The percent incomplete is applied to the inventory of pending work to estimate the amount for deferred revenue liability.
At the end of fiscal year 2004, deferred revenue liability was $579.6 million, representing an increase of $204.6 million, or 54.6 percent, over the past four years. The deferred revenue liability includes unearned patent and trademark fees, as well as undeposited checks. The unearned patent fees represented 84.7 percent of this liability. The graph below depicts the composition of the deferred revenue liability, in addition to the increase in this liability during each of the past four years.
Deferred revenue at the USPTO is largely impacted by the change in patent and trademark filings and changes in the first action pendency rates. The following table depicts the changes in the filings and pendencies during the past four years.
|Filings and Pendencies||FY 2001||FY 2002||FY 2003||FY 2004|
|Percentage Change in Patent Filings||10.6%||2.5%||0.6%||6.0%|
|Patent First Action Pendency (months)||14.4||16.7||18.3||20.2|
|Total Patent Pendency (months)||24.7||24.0||26.7||27.6|
|Percentage Change in Trademark Filings||(21.1%)||(12.7%)||3.2%||11.7%|
|Trademark First Action Pendency (months)||2.7||4.3||5.4||6.6|
|Total Trademark Pendency (months)||17.8||19.9||19.8||19.5|
|Note 1: Preliminary data (back to text)|
The Statement of Changes in Net Position presents the changes in the financial position of the USPTO due to results of operations and unexpended appropriations. The major components of the movement in net position are the net income or net cost for the year, and the imputed financing of post retirement costs for the USPTO employees. The change in the net position during the past four years is presented in the following table.
|FY 2001||FY 2002||FY 2003||FY 2004|
|Percentage Change in Net Position||11.4%||(14.2)%||(1.8)%||16.3%|
The increase in net position from $403.2 million at the end of fiscal year 2003 to $469.1 million at the end of fiscal year 2004, or 16.3 percent, is attributable largely to the permanent rescission restored to a temporarily unavailable reduction in budgetary resources, offset by the results of operations.