Colonial Williamsburg said a change in the way it accounts for pensions was mostly responsible for a tripling of its profits for 2006, according to The Virginia Gazette.
The organization’s federal tax return shows a little more than $66 million in earnings last year, compared to $23 million for 2005. Finance vice president Bob Taylor told the Gazette that the accounting change produced $38 million of the $43 million profit increase.
Under new accounting rules, the paper noted, companies with under-funded pension plans must identify their true obligations. However, Colonial Williamsburg’s pension portfolio was actually over-funded, so it moved $38 million from the expense side to the revenue side of the income statement. As a result, revenue rose 14 percent to $196.9 million, while expenses fell 11 percent to $129.5 million in 2006.
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The Gazette reported Colonial Williamsburg’s tax return differs from its annual report, which showed a $45.4 million operating deficit on $139.4 million in revenue. That’s because the annual report covers Colonial Williamsburg’s non-profit and business activities, while its tax form deals only with the tax-exempt foundation, supports the museum and its educational mission.
Taylor files a second tax return that covers the business side, which includes hotels, restaurants, shops, and services, the paper wrote.
