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Financial Statements


Quoted Prices in


Fair-Value Measurements at Dec. 31, 2010, using Signifi cant


Active Markets for Identical Assets (Level 1)


Money market accounts


U.S. government and agency obligations


Asset-backed securities Municipal bonds Corporate bonds


Common stock Materials Industrials


Consumer goods Energy


Health care Financials


Telecommunication Technology


Utilities and other Accrued interest


$ 971,186


14,511,592 -


- -


866,634


1,961,076 2,201,059 1,445,041 1,492,950 2,764,561 559,618


1,852,958 655,242 300,728


Other Observable Inputs


(Level 2) $


NOTE 16 – FUNCTIONAL EXPENSES


Signifi cant Unobservable Inputs


(Level 3)


- $ -


5,709,254 1,592,447 11,715,032


- -


- -


- -


$ 29,582,645 $ 19,016,733 $


Historical returns of multiple asset classes were analyzed to develop a risk-free real rate of return and risk premium for each asset class. The overall rate for each asset class was developed by combining a long-term infl ation component, the risk-free real rate of return, and the associated risk premium. A weighted average rate was developed based on these overall rates and the target asset allocation of the plan.


Weighted-average assumptions Discount rate


Expected return on plan assets Rate of compensation increase


2011


5.25% 8.00% 0.00%


2010


5.96% 8.00% 0.00%


The amounts of net loss and net prior-service cost expected to be recognized as components of net periodic-benefi t cost for the year ending Dec. 31, 2011 are $1,209,754 and $121,085, respectively.


- - -


- -


- -


- -


- - -


The following represents a functional breakdown of the Legion’s expenses by program and supporting services:


2011


Program services Veterans programs and services


Americanism, Children & Youth activities


Supporting services Management and general Member development Fundraising


$ 33,604,636 3,958,400


$ 37,563,036


16,442,779 11,445,606 5,234,392


$ 33,122,777 2010


$ 35,108,669 2,806,143


$ 37,914,812


12,929,185 10,945,144 4,162,115


$ 28,036,444 $ 70,685,813 $ 65,951,256


Member development includes direct-response advertising expense of $8,447,032 and $8,970,472 for the years ended Dec. 31, 2011 and 2010.


NOTE 17 – LITIGATION


The Legion is currently involved in and/or has been mentioned as a defendant or co-defendant in several legal actions. It is the opinion of the national judge advocate that these claims are without merit, and that any ultimate liability of the Legion with respect to these actions will not materially aff ect the fi nancial statements of the Legion.


52 T e American Legion Annual Report | 2012


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