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The FY 1974 construction appropriation allowance by OMB totaling $5,070,000 would provide principally for the new $3,000,000 lion and tiger exhibit at the Zoo, as well as planning monies for Zoo parking facilities and improvements at Mt. Hopkins Observatory and the Silver Hill storage area plus planning for NMHT library addition. 

Operations on the Institution's Private side for the first half of the current year are somewhat better than previously expected, principally because of excellent results from the Magazine. Present budget projections call for an FY 1973 surplus of about $225,000 for our unrestricted fund operations.
 
The Freer Gallery of Art is benefiting from increased endowment fund income from the Total Return investment policy and should live well within its income this year. The level of the Institution's grants and contracts is expected to rise by 5-10% this year. 

The Institution's financial position is currently quite healthy with respect to cash and current fund investments which now total $5,500,000 reflecting not only the improved current unrestricted fund operations but also greater advance cash flow from higher level Magazine operations and substantial gifts for restricted purposes which have not yet been expended.
 
Mr. Wheeler pointed out that endowment funds as of December 31, 1972 show Total Return accomplishments since July 1, 1971 of 25% for the Freer Fund, 27 1/2% for the Consolidated Fund, 36% for Endowment Fund No. 3 and 19% for the Special Endowment Fund, -- as compared with a similar gain by the general market averages of about 20% in the same period. 

The complete financial report follows.