The Broad Institute, Inc. Report on Federal Awards in Accordance with the Uniform Guidance for the Year Ended June 30, 2020 EIN # 26-3428781 the Broad Institute, Inc

The Broad Institute, Inc. Report on Federal Awards in Accordance with the Uniform Guidance For the Year Ended June 30, 2020 EIN # 26-3428781 The Broad Institute, Inc. Index Year Ended June 30, 2020

Page(s)

Part I - Consolidated Financial Statements and Schedule of Expenditures of Federal Awards

Report of Independent Auditors ...... 1–2

Consolidated Financial Statements and Footnotes ...... 3–2

Schedule of Expenditures of Federal Awards ...... 2–

Note to Schedule of Expenditures of Federal Awards ...... 3

Part II - Reports on Internal Control and Compliance

Report of Independent Auditors on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ...... 3–

Report of Independent Auditors on Compliance With Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with the Uniform Guidance ...... 3–3

Part III - Findings and Questioned Costs

Schedule of Findings and Questioned Costs ...... 3–3

Summary Schedule of Prior Audit Findings ...... 3

0DQDJHPHQW V9LHZVDQGCorrective Action Plan ...... ......  Part I - Consolidated Financial Statements and Schedule of Expenditures of Federal Awards

Report of Independent Auditors

To the Board of Directors of The Broad Institute, Inc. Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of The Broad Institute, Inc. and its subsidiary (the “Institute”), which comprise the consolidated statements of financial position as of June 30, 2020 and 2019, and the related consolidated statements of activities and of cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Institute’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Institute’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of The Broad Institute, Inc. and its subsidiary as of June 30, 2020 and 2019 and the changes in their net assets and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 2 to the consolidated financial statements, the Institute changed the manner in which it presents a cash balance included within investments in the consolidated statements of cash flows in fiscal year 2020. Our opinion is not modified with respect to this matter.

PricewaterhouseCoopers LLP, 101 Seaport Boulevard, Suite 500, Boston, Massachusetts 02210 T: 617 530 5000, www.pwc.com/us

Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying schedule of expenditures of federal awards for the year ended June 30, 2020 is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), and is not a required part of the consolidated financial statements. The information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures, in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the consolidated financial statements taken as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 29, 2020 on our consideration of the Institute’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters for the year ended June 30, 2020. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Institute's internal control over financial reporting and compliance.

Boston, Massachusetts October 29, 2020

2 The Broad Institute, Inc. Consolidated Statements of Financial Position June 30, 2020 and 2019

(in thousands of dollars) 2020 2019

Assets Cash and cash equivalents$ 240,844 $ 249,540 Agency cash 7,739 6,429 Accounts receivable, net 94,233 85,930 Materials and supplies inventory 16,579 18,011 Prepaid expenses and other assets, net 39,909 26,016 Pledges receivable, net 107,177 186,982 Beneficial interest in trust 29,301 26,526 Investments 718,364 555,138 Property, plant and equipment, net 412,430 418,697 Total assets$ 1,666,576 $ 1,573,269 Liabilities Accounts payable$ 14,062 $ 12,179 Accrued expenses and other liabilities 131,117 122,312 Agency funds payable 7,739 6,429 Advance payments 71,251 48,827 Capital lease obligation 99,287 99,852 Debt, net 282,050 297,291 Total liabilities 605,506 586,890 Commitments and contingencies (see accompanying notes) Net assets Without donor restrictions 220,148 217,123 With donor restrictions 840,922 769,256 Total net assets 1,061,070 986,379 Total liabilities and net assets$ 1,666,576 $ 1,573,269

The accompanying notes are an integral part of these consolidated financial statements.

3 The Broad Institute, Inc. Consolidated Statements of Activities Years Ended June 30, 2020 and 2019

2020 2019 Without Donor With Donor Without Donor With Donor (in thousands of dollars) Restrictions Restrictions Total Restrictions Restrictions Total

Operating activities Revenues and other support Grants and contracts$ 329,707 $ 8,966 $ 338,673 $ 358,574 $ 34,242 $ 392,816 Endowment returns made available for operations 29,614 211 29,825 28,839 - 28,839 Fees and services 48,945 - 48,945 42,490 - 42,490 Contributions, net 2,505 155,040 157,545 1,455 69,516 70,971 Other income 22,843 - 22,843 16,796 - 16,796 Net assets released from restrictions 81,996 (81,996) - 98,933 (98,933) - Total revenues and other support 515,610 82,221 597,831 547,087 4,825 551,912 Expenses Research 415,490 - 415,490 417,420 - 417,420 Management and general 101,941 - 101,941 87,446 - 87,446 Total operating expenses 517,431 - 517,431 504,866 - 504,866 (Loss) income from operations (1,821) 82,221 80,400 42,221 4,825 47,046 Nonoperating activities Nonoperating gains (losses) Investment return, net 4,846 16,495 21,341 3,952 16,708 20,660 Change in beneficial interest in trust - 2,775 2,775 - 14,145 14,145 Endowment returns made available for operations - (29,825) (29,825) - (28,839) (28,839) Total nonoperating gains (losses), net 4,846 (10,555) (5,709) 3,952 2,014 5,966 Increase in net assets 3,025 71,666 74,691 46,173 6,839 53,012 Net assets Beginning of year 217,123 769,256 986,379 170,950 762,417 933,367 End of year$ 220,148 $ 840,922 $ 1,061,070 $ 217,123 $ 769,256 $ 986,379

The accompanying notes are an integral part of these consolidated financial statements.

4 The Broad Institute, Inc. Consolidated Statements of Cash Flows June 30, 2020 and 2019

(in thousands of dollars) 2020 2019

Cash flows from operating activities Increase in net assets $ 74,691 $ 53,012 Adjustments to reconcile change in net assets to net cash provided by operating activities Depreciation 34,911 35,824 Amortization (2,741) (2,709) Realized and unrealized gains, net (17,004) (13,937) (Gain) loss on disposal of equipment, net (8) 222 Contributions used for long-term investments (135,340) (55,926) Donated equipment (195) (368) Change in pledges receivable, net 79,805 59,186 Change in accounts receivable, net (8,303) (13,705) Change in prepaid expenses and other assets (13,893) (3,050) Change in operating assets (25,070) (25,311) Change in operating liabilities 33,901 (14,111) Net cash, cash equivalents and restricted cash provided by operating activities 20,754 19,127 Cash flows from investing activities Purchase of property, plant and equipment (28,122) (22,710) Proceeds from sale of equipment 202 43 Purchase of investments (320,999) (23,762) Proceeds from sale of investments 159,694 35,642 Net cash, cash equivalents and restricted cash used in investing activities (189,225) (10,787) Cash flows from financing activities Payments on capital leases (565) (538) Payments on debt (12,500) (12,500) Contributions used for long-term investments 135,340 55,926 Net cash, cash equivalents and restricted cash provided by financing activities 122,275 42,888 Net (decrease) increase in cash, cash equivalents and restricted cash (46,196) 51,228 Cash, cash equivalents and restricted cash Beginning of year 287,040 235,812 End of year $ 240,844 $ 287,040

Supplemental information Capital expenditures accrued $ 3,575 $ 3,054 Cash paid for interest 17,145 17,750 Due to Members settled with marketable securities - 2,930 Cash, cash equivalents and restricted cash Cash and cash equivalents as shown on the consolidated statements of financial position$ 240,844 $ 249,540 Cash included in Investments (see Note 5) - 37,500 Total cash, cash equivalents and restricted cash as shown on the consolidated statements of cash flows$ 240,844 $ 287,040

The accompanying notes are an integral part of these consolidated financial statements.

5 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

1. Corporate Organization and Purpose

The Broad Institute, Inc. (the “Institute”) located in Cambridge, Massachusetts, is a non-profit organization existing under the laws of the Commonwealth of Massachusetts. The Institute is organized as a collaboration of the Massachusetts Institute of Technology (“MIT”), Harvard University (“Harvard”) and the Harvard-Affiliated Hospitals, around scientific programs and platforms, bringing together biology and technology-focused scientists to jointly build, apply, and share with scientists worldwide the cutting edge tools and knowledge needed to revolutionize medical knowledge and practice.

The Institute was first established in 2003 as a laboratory of MIT with an initial $200 million operating gift from The Eli and Edythe Broad Foundation. To secure the permanency of the Institute, The Eli and Edythe Broad Foundation pledged an additional endowment gift of $400 million on July 1, 2009 and the Institute became an independent 501(c) (3) organization under a collaboration agreement between the Institute, Harvard, MIT and The Broad Foundation (the “Members”).

The accompanying consolidated financial statements include the Clinical Research Sequencing Platform, LLC, a wholly owned and controlled subsidiary, which develops, maintains and operates a clinical laboratory at the Institute.

2. Summary of Significant Accounting Policies

Basis of Presentation The financial statements present the activities of the Institute as a whole, including affiliated organizations controlled by the Institute, and have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Intercompany accounts and transactions have been eliminated in preparing the consolidated financial statements. Resources are classified based on the existence or absence of donor-imposed or other external restrictions. Accordingly, net assets of the Institute and changes therein are classified and reported as follows:

Net Assets With Donor Restrictions Net assets with donor restrictions include donor gifts to be held in perpetuity. Generally the donors of these assets permit the Institute to use all or part of the income earned and capital appreciation, if any, on related investments for general or specific purposes. Also included are net assets whose use is subject to donor-imposed stipulations that can be fulfilled by actions of the Institute and/or the passage of time. Unspent gains on endowments held in perpetuity are classified as net assets with donor restrictions until the Institute appropriates and spends such sums in accordance with Massachusetts law, at which time they will be released to revenues without donor restrictions.

Net Assets Without Donor Restrictions Net assets not subject to explicit donor-imposed stipulations. Revenues are reported as increases in net assets without donor restrictions unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in net assets without donor restrictions. Gains and losses on investments and other assets or liabilities are reported as increases or decreases in net assets without donor restrictions unless their use is restricted by explicit donor stipulation or law. Expirations of restrictions on net assets, that is, the donor-imposed stipulated purpose has been accomplished and/or the stipulated time period has elapsed, are reported as reclassifications between the applicable classes of net assets. Amounts received for grants and contracts (under exchange transactions) are reflected in grants and contracts revenue or as advance payments if expenditures have yet to be incurred.

6 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

Contributions Contributions, including unconditional promises to give, are recognized when received. Contributions other than cash are generally recorded at fair value on the date of the gift. Contributions of securities are generally liquidated when received, unless restricted from doing so. The Institute reports contributions in the form of equipment as operating support without donor restrictions at fair market value when received. The Institute receives contributions from related parties in the ordinary course of business.

Promises to give that are scheduled to be received after the statement of financial position date are shown as increases in net assets with donor restrictions and are reclassified to net assets without donor restrictions when the purpose or items’ restrictions are met. Promises to give, subject to donor-imposed stipulations that the corpus be maintained permanently, are recognized as increases in net assets with donor restrictions. Conditional promises to give are not recognized until they become unconditional, that is, when the conditions on which they depend are substantially met. Contributions to be received after one year are discounted at the appropriate rate commensurate with risk. Amortization of such discount is recorded as additional contribution revenue in accordance with restrictions imposed by the donor on the original contribution, as applicable. Fundraising expenditures for the years ended June 30, 2020 and 2019 were $4.4 million and $3.6 million, respectively.

Dividends, interest and net gains on endowment investments and similar funds are reported as follows:

 As increases in net assets with donor restrictions if the terms of the gift require that they be added to the corpus of an endowment fund invested in perpetuity or if the terms of the gift or relevant state law impose restrictions on the current use of the income or net realized and unrealized gains; and

 As increases in net assets without donor restrictions in all other cases.

Cash and Cash Equivalents Cash and cash equivalents include short-term, highly liquid investments with a maturity of three months or less at the time of purchase. Cash and cash equivalents that may be held in the investment portfolio are included in the investments line item on the statements of financial position. The Institute has made a policy election to treat all short-term highly liquid investments held in the investment portfolio as investments in the statements of financial position, even though they otherwise meet the definition of cash equivalents. These amounts have also been excluded from beginning and ending balances of cash in the statements of cash flows.

Agency Cash Agency cash consists of amounts held by the Institute that relate to funds for the Starr Cancer Consortium (“SCC”). An offsetting amount is recorded for the same amount in liabilities as agency funds payable. Funds awarded to the Institute by SCC were $1.1 million and $1.6 million for the years ended June 30, 2020 and 2019, respectively.

Materials and Supplies Inventory Materials and supplies inventory pertains to the Institute’s laboratory operations. The Institute uses the moving average cost basis to account for its inventory which is valued at the lower of cost or net realizable value.

7 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

Beneficial Interest in Trust The Institute has a beneficial interest in a trust. Accordingly, the Institute recognizes its interest in the trust on the statements of financial position with changes in its interest recognized in the nonoperating section of the statements of activities. The timing and amounts of pledges and distributions are based upon trustee approval and are reported as gifts with donor restrictions. The Institute received $52.5 million and $45.0 million in pledges for the years ended June 30, 2020 and 2019, respectively, of which $24.5 million and $25.0 million remained outstanding as of June 30, 2020 and 2019, respectively.

Investments Investments are carried at fair value. Investment transactions are recorded on the trade date. Investment return is presented net of investment fees.

Property, Plant and Equipment Property, plant and equipment are stated at cost or if received by gift or donation, at fair value, at date of gift. When assets are retired or otherwise disposed of, both the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reported as income or expense for the period. The cost of repairs and maintenance is expensed as incurred, while significant renewals and betterments are capitalized. Depreciation is calculated using the straight-line method over the following estimated useful lives:

Building and building improvements 10–25 Years Equipment 3–8 Years Leasehold improvements The shorter of useful life or remaining lease term Capital leases The shorter of useful life or remaining lease term

Debt interest costs related to construction projects are capitalized as part of the project during construction.

Advance Payments Advance payments represent amounts received by the Institute from corporations, foundations and other external sponsors under terms that generally require assets, rights, or privileges to be exchanged between the Institute and the sponsor. Revenue is recognized as expenses are incurred on sponsored projects.

Deferred Charges Deferred charges represent differences in timing between incurred expenses and billing, including the carry-forward of over and under recoveries of indirect costs related to research contracts and grants. Deferred charges also include work in progress in the specialized services facilities, net of payments to date. These balances are included in prepaid expenses and other assets, net or in accrued expenses and other liabilities on the statements of financial position depending on their position at June 30. At June 30, 2020 and 2019, the deferred charges in prepaid expenses and other assets, net were $21.3 million and $12.4 million, respectively. Deferred charges included in accrued expenses and other liabilities were $6.7 million and $17.0 million at June 30, 2020 and 2019, respectively.

8 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

Deferred Financing Costs Costs incurred in connection with the issuance of bonds have been deferred and are being amortized over the term of the obligation using the effective interest method. Unamortized bond issuance costs were $932 thousand and $993 thousand at June 30, 2020 and 2019, respectively. These costs are presented as a deduction from debt on the statements of financial position.

Operations The statements of activities report the Institute’s operating and nonoperating activities. Operating revenues and expenses consist of those activities attributable to the Institute’s current annual research programs, gifts received, and services and fees. Nonoperating activities includes net investment return and changes in beneficial interest in trust.

Grants and Contracts Revenue The Institute recognizes revenue from external organizations for services provided under exchange and nonexchange grants and contracts. The majority of research grant revenue pertains to nonexchange transactions. Unconditional grants and contracts are recognized as revenue in the period received in the appropriate net asset category, based on the existence or absence of donor imposed restrictions. If donor imposed restrictions are present, the associated revenue is reported as an increase in net assets with restriction and are reclassified to net assets without donor restrictions when the restrictions are met. Grants and contracts revenues whose restrictions are met in the same reporting period are reported as net assets without donor restriction.

Revenues from nonexchange transactions may be subject to conditions in the form of both a barrier to entitlement and a refund of amounts paid (or a release from obligation to make future payments). The Institute recognizes revenue earned from conditional nonexchange grants and contracts as these conditions are satisfied. The Institute held $259.7 million and $213.6 million of conditional grants and contracts not recognized as revenue in the statements of activities, at June 30, 2020 and 2019, respectively.

Revenues from exchange transactions are recognized as the Institute satisfies performance obligations, which in some cases mirrors the timing of when related costs are incurred. Unrecognized revenue under grants and contracts for which contractual performance obligations have not yet been made or the right to recognize revenue is dependent on future events totaled $249.0 million and $197.1 million at June 30, 2020 and 2019, respectively.

Research grants provide for the recovery of direct and indirect costs. Direct and indirect costs charged to federal grants are subject to federal audit. Related indirect costs from federal grants are recorded at a fixed rate with carry-forward of over or under recoveries, which have been negotiated with the federal government through June 30, 2020. The carry-forward is included in the calculation of negotiated fixed rates in future years. Any adjustment in the rate is included or deducted from grants and contracts revenue. The Institute received 52% and 50% of its grants and contracts revenues from governmental agencies for the years ended June 30, 2020 and 2019, respectively. The Institute received 91% and 95% of this revenue from the National Institutes of Health for the years ended June 30, 2020 and 2019, respectively.

Fees and Services Revenue Fees and services revenue primarily consists of revenue recognized under exchange contracts pertaining to the operation of the Institute’s specialized service facilities. As a practical expedient, the Institute has elected to recognize revenue based on the amount invoiced to the customer, as the amount invoiced directly corresponds to the value received and the Institute’s performance completed to date.

9 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

Other Income Other income primarily consists of right-to-use intellectual property licensing revenue that is recognized at the time the customer is granted access to the intellectual property and can begin deriving benefit from that use. The Institute recognized $20.2 million and $14.6 million under intellectual property licensing “right to use” agreements for the years ended June 30, 2020 and 2019, respectively. Under some intellectual property licensing contracts, the Institute may be entitled to additional revenue based on the achievement of certain milestones by customers. For the years ended June 30, 2020 and 2019, revenue related to milestone achievements was $8.4 million and $5.2 million, respectively. There were no material contractual performance obligations that had not been met for the years ended June 30, 2020 and 2019.

Retirement Plan The Institute maintains a retirement plan under Internal Revenue Code 401(k). This plan is funded from both employee voluntary contributions through payroll deductions and a company match contribution. The Institute matches participant contributions dollar for dollar up to 6% as well as an additional discretionary contribution on applicable compensation to eligible employees. Discretionary contributions were 3% for the years ended June 30, 2020 and 2019. Employer contributions to the plan for the years ended June 30, 2020 and 2019 totaled $13.2 million and $11.8 million, respectively.

Use of Estimates The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and disclosures. The Institute’s significant estimates include the valuation of its investments and estimated useful lives of fixed assets. Actual results could differ from those estimates.

Tax Status The Institute is a qualified tax-exempt organization under section 501(c)(3) of the Internal Revenue Code.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted. The Act impacts the Institute in several ways, including new excise taxes on certain executive compensation and establishing new rules for calculating unrelated business taxable income. The overall impact of the Act will not be known until further regulatory guidance is provided to assist the Institute with calculating income and excise tax liabilities. The Institute continues to evaluate the impact of tax reform on the organization.

Recent Accounting Pronouncements In fiscal year 2020, the Institute adopted ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which eliminated the requirement to disclose the fair value of financial instruments measured at cost (such as the fair value of debt). This standard also allows an entity to choose, investment-by-investment, to report an equity investment that neither has a readily determinable fair value, nor qualifies for the practical expedient for fair value estimation using NAV, at its cost minus impairment (if any), plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issue. The adoption of this guidance did not have a material impact on the Institute’s consolidated financial statements and related disclosures.

In fiscal year 2020, the Institute adopted ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Payments. This guidance is intended to reduce diversity in the presentation of certain cash receipts and payments within the consolidated statements of cash

10 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

flows. This guidance did not have a material impact on the Institute’s consolidated financial statements and related disclosures.

In fiscal year 2020, the Institute adopted ASU 2016-18, Statement of Cash Flows: Restricted Cash. Under this new guidance, the Institute must identify all cash, cash equivalents, and amounts generally described as restricted cash or cash equivalents within the consolidated statements of financial position for inclusion in the beginning and ending totals within the consolidated statements of cash flows unless a policy election is made to exclude cash equivalents held within investments. The Institute has evaluated and applied this guidance on a retrospective basis and included all applicable cash balances within the consolidated statements of cash flows. The retrospective adoption of this guidance in fiscal year 2020 resulted in the Institute changing the manner in which it presents a cash balance included within investments at June 30, 2019 in the consolidated statements of cash flows. No other material impacts on the Institute’s consolidated financial statements resulted from the adoption of this guidance.

In February 2016, the FASB issued ASU 2016-02, Leases, regarding accounting for leases. The standard aims to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Institute is evaluating the impact this standard will have on the consolidated financial statements upon adoption in fiscal year 2021.

In August 2018, the FASB issued ASU 2018-13 – Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. Under this new guidance, the Institute will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy. Additionally, the Institute will also disclose updates in the Level 3 Valuation Techniques table to include the weighted average of the unobservable inputs presented therein. Lastly, for investments in certain entities that calculate net asset value, the requirement to disclose the estimated period of time over which the underlying assets might be liquidated will be modified to only require disclosure if the investee has communicated the timing to the Institute or announced the timing publicly. The Institute is evaluating the impact this standard will have on the consolidated financial statements upon adoption in fiscal year 2021.

Reclassification Certain prior year amounts have been reclassified to conform to the current year presentation.

3. Pledges Receivable

Pledges receivable represent unconditional promises to give. Pledges expected to be collected within one year are recorded at their net realizable value. Pledges that are expected to be collected in future years are recorded at the present value of estimated future cash flows. The present value of estimated future cash flows has been measured using risk-free rates of return adjusted for market and credit risk established at the end of the measurement period using The Fair Value Option for Financial Assets and Financial Liabilities in accounting for pledges receivable. The pledge discount rate applied as of June 30, 2020 ranges from 0.16% to 0.29%. Pledges receivable are classified as Level 3 under the valuation hierarchy described in Note 5. The measurement period of outstanding pledges is determined on a pledge by pledge basis.

Included in pledges receivable is the remaining Eli and Edythe Broad Foundation endowment pledge. According to The Broad Foundation gift agreement, the remaining pledge shall be adjusted by the Foundation’s cumulative rate of return on its investments. At December 31, 2019, the Foundation’s annual rate of return was 11.7%, increasing the Institute’s pledge receivable due

11 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

from the Foundation by $13.1 million. At December 31, 2018, the Foundation’s annual rate of return was 6.0%, increasing the Institute’s pledge receivable due from the Foundation by $10.7 million. The Foundation is scheduled to make quarterly payments of $15.0 million until the remaining pledge balance, adjusted for annual investment returns, is paid in full.

Unconditional promises included in the consolidated statements of financial position at June 30, 2020 and 2019 are expected to be realized as follows:

(in thousands of dollars) 2020 2019

Less than one year$ 102,386 $ 104,402 One to five years 4,842 82,876 Pledges receivable 107,228 187,278 Less: Present value discount (51) (296) Pledges receivable, net$ 107,177 $ 186,982

A rollforward of pledges receivable at June 30, 2020 and 2019 is as follows (in thousands):

Pledges receivable, net at June 30, 2018 $ 246,168 New pledges 92,159 Pledge payments received (151,072) Pledge discount (273) Pledges receivable, net at June 30, 2019 $ 186,982 New pledges 119,194 Pledge payments received (199,244) Pledge discount 245 Pledges receivable, net at June 30, 2020 $ 107,177

At June 30, 2020 and 2019, the Institute held $267.0 million and $2.0 million, respectively, of conditional pledges not recognized as assets in the statements of financial position. Of the conditional pledges at June 30, 2020, $145.0 million were subject to matching requirements by specific dates and $122.0 million were considered revocable by the donor. The conditional pledges at June 30, 2019 were considered revocable by the donor.

4. Endowment Fund

The Institute’s endowment consists of contributions with donor restrictions to be invested in perpetuity to support the Institute’s primary mission to propel progress in biomedicine through research aimed at the understanding and treatment of disease, and the dissemination of scientific knowledge for the public good. Net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions.

The Massachusetts Uniform Prudent Management of Institutional Funds Act (“UPMIFA”) allows the Institute to appropriate for expenditure or accumulate so much of an endowment fund as the Institute determines is prudent for the uses, benefits, purposes and duration for which the endowment fund is established, subject to the intent of the donor as expressed in the gift instrument. Unless otherwise stated in the gift instrument, the assets in an endowment fund should

12 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

be assets with donor restriction until appropriated for expenditure by the Board of Directors. In accordance with UPMIFA, the Institute considers the following factors in making a determination to appropriate or accumulate endowment funds:

a. The duration and preservation of the fund

b. The purpose of the Institute and the endowment fund with donor restrictions

c. General economic conditions

d. The possible effect of inflation and deflation

e. The expected total rate of return from income and the depreciation of investments

f. Other resources of the Institute

g. The investment policies of the Institute

The purpose of the endowment funds is for research purposes as restricted by the donors.

Changes in endowment net assets with donor restrictions consisted of the following:

2020 2019 (in thousands of dollars)

Endowment net assets at beginning of year $ 644,800 $ 644,424 Contributions and pledges 58,099 12,820 Investment return 15,764 16,395 Endowment returns made available for operations (29,825) (28,839) Endowment net assets at end of year $ 688,838 $ 644,800

Endowment Spending The Institute has adopted a spending policy to calculate annual distributions from its endowment funds. The policy prescribes distributions from the endowment by weighting 70% of the previous year’s distribution, adjusted for inflation, and 30% to an established spending rate of 4.7% of the endowment value two years prior unless otherwise directed by the Board for any given year. If the total calculated annual distribution exceeds 6% of the prior year’s endowment value, then the annual distribution must be reduced, or unanimous approval of the Members must be secured. The calculated distributions were $29.8 million and $28.8 million for the years ending June 30, 2020 and 2019, respectively.

To the extent that accumulated realized and unrealized losses are in excess of accumulated gains for donor restricted endowment funds (“underwater funds”), they are reported as decreases in net assets with donor restrictions. The Institute held no underwater funds at June 30, 2020 or 2019.

5. Investments and Fair Value of Financial Instruments

The Institute has valued its financial instruments in accordance with the principles of accounting standards which establish a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Observable inputs reflect market data obtained from sources

13 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

independent of the reporting entity. Unobservable inputs reflect the entity’s own assumptions about how market participants would value an asset or liability based on the best information available. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The three levels of inputs are as follows:

Level 1 Quoted prices in active markets for identical assets or liabilities. Market price data is generally obtained from relevant exchange or dealer markets.

Level 2 Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the same term of the assets and liabilities. Inputs are obtained from various sources including market participants, dealers and brokers.

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of assets and liabilities.

For investments in externally managed funds, the Institute has utilized the net asset value (“NAV”) reported by each of the funds as a practical expedient to estimate the value of the investment.

The table below represents the Institute’s financial instruments at fair value at June 30, 2020, grouped by the valuation hierarchy as defined above:

2020 Quoted Prices Significant in Active Other Significant Fair Markets for Observable Unobservable Value at Identical Assets Inputs Inputs June 30, (in thousands of dollars) (Level 1) (Level 2) (Level 3) 2020

Common stock$ 24,227 $ - $ - $ 24,227 Pledges receivable, net - - 107,177 107,177 Beneficial interest in trust - - 29,301 29,301 Total assets at fair value$ 24,227 $ - $ 136,478 $ 160,705

The table below represents the Institute’s financial instruments at fair value at June 30, 2019, grouped by the valuation hierarchy as defined above:

2019 Quoted Prices Significant in Active Other Significant Fair Markets for Observable Unobservable Value at Identical Assets Inputs Inputs June 30, (in thousands of dollars) (Level 1) (Level 2) (Level 3) 2019

Pledges receivable, net $ - $ - $ 186,982 $ 186,982 Beneficial interest in trust - - 26,526 26,526 Total assets at fair value$ - $ - $ 213,508 $ 213,508

14 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

Investments include units in the Global Endowment Fund II, LP, SCHF USTE, L.P. (“Sequoia Heritage”), Partners Capital Investment Group, LLP (“Partners Capital”), and CareGroup Investment Partnership, LLP (the “Funds”). Partners Capital and Sequoia Heritage were investment agreements entered into during the years ended June 30, 2020 and 2019, respectively. Profit and losses of the Funds are allocated to the partners in the Funds according to their respective units in the Funds. The units are valued utilizing the NAV provided by the Funds. The Funds determine net asset values based on the net contribution to its underlying investment funds and its allocated share of the undistributed profits and losses, including realized and unrealized gains and losses, based on the information provided by the management or administrator of the Investment Funds, which may include the audited financial statements of the Investment Funds. Management has ongoing procedures in place to evaluate and monitor new and ongoing third party valuations including regular communication with investment advisors, performance benchmarking and review of partnership financial statements. The Institute has performed due diligence around the investments and has determined that NAV is an appropriate measure of fair value at June 30. Fair value of the Funds using NAV were $694.1 million and $517.6 million at June 30, 2020 and 2019, respectively. At June 30, 2019, Sequoia Heritage held cash pertaining to a funded commitment in the amount of $37.5 million. Unfunded commitments as of June 30, 2020 were $7.4 million. There were no unfunded commitments as of June 30, 2019. The fair value of investments were $718.4 million and $555.1 million at June 30, 2020 and 2019, respectively.

The Funds’ liquidity policies set the parameters for any participant seeking to liquidate funds as follows:

For the Global Endowment Fund II, LP, up to 100% of total investments can be withdrawn, with a minimum remaining investment of $10.0 million, annually on the last business day of the year. Redemption notice is to be provided on or prior to September 1 of the year of anticipated withdrawal.

Partners Capital has no explicit withdrawal terms, however at June 30, 2020, 89.5% of invested funds under management have quarterly liquidity or better; 10.4% has annual liquidity restrictions, subject to a 50% gate, and 0.1% is illiquid.

Notice of withdrawal from Sequoia Heritage must be made at least 90-days prior to the end of their fiscal year. A distribution of 90% of liquid investments, less a reserve for future expenses and management fees, will be made 30 days after the end of the Sequoia Hertage’s fiscal year. As promptly as possible following October 15th of the fiscal year following notice, the reserve will be adjusted for expenses and management fees against the remaining liquid investment balance and Sequoia Heritage will distribute the remaining liquid balance. Net proceeds from the sale of previously illiquid investments will be distributed to the Institute within 45 days of such sale by Sequoia Heritage, subject to a ceiling of 15% of the liquid net asset value. In addition, the Institute’s right to receive distributions may be suspended for all or part of any period of a market disruption.

For CareGroup Investment Partnership, LLP, up to 6% of total investments are to be convertible within ten days; for the next 19% of the total investments, one-half is to be distributed within ten days and the remainder within sixty days; and for the next 75%, one quarter is to be distributed within ten days, one quarter within sixty days and the remainder within ninety days. If at any time, the withdrawal requested is greater than the liquid investments held, semi-liquid or illiquid investments are to be used which may result in distribution delays due to the illiquid nature of such funds. A portion of the Institute’s position in CareGroup Investment Partnership, LLP has been liquidated as of June 30, 2020, with $110.3 million of illiquid investments remaining in CareGroup Investment Partnership, LLP. These remaining illiquid investments are being liquidated over time as the restrictions on the funds allow.

15 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

Investment allocation at June 30, 2020 and 2019 was as follows:

2020 2019

Hedged equity/credit 18 % 28 % Equity 49 38 Cash and cash equivalents 11 10 Real estate/real assets 12 10 Fixed income 4 14 Common stock 3 - Other 3 - 100 % 100 %

For the rollforward of pledges receivable, refer to Note 3.

The Institute held $43.9 million and $32.6 million of investments on behalf of its beneficial interest in trust as of June 30, 2020 and 2019, respectively. An offsetting amount is recorded for the same amount in accrued expenses and other liabilities. The table below is a rollforward of the Institute’s beneficial interest in trust classified within Level 3 of the fair value hierarchy at June 30, 2020 and 2019:

(in thousands of dollars)

Beneficial interest in trust at June 30, 2018 $ 12,381 Change in value 59,145 Pledges (45,000) Beneficial interest in trust at June 30, 2019 26,526 Change in value 55,275 Pledges (52,500) Beneficial interest in trust at June 30, 2020 $ 29,301

The methods described above may produce a fair value that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Institute believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investments, it is at least reasonably possible that changes in the value of investment securities will occur in the near term and that such changes could materially affect market values and the amounts reported in the statements of financial position.

16 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

6. Property, Plant and Equipment

The major categories of property, plant and equipment at June 30, 2020 and 2019 are summarized as follows:

(in thousands of dollars) 2020 2019

Land$ 25,000 $ 25,000 Building and building improvements 304,639 301,044 Equipment 176,444 174,681 Leasehold improvements 58,445 49,931 Building under capital lease 101,720 101,720 Assets under construction 3,286 1,564 Total property, plant and equipment, gross 669,534 653,940 Accumulated depreciation (257,104) (235,243) Total property, plant and equipment, net$ 412,430 $ 418,697

Effective February 1, 2016, the Institute has a 50 year, $101.7 million capital lease with MIT, a related party, which relates to building space. The lease provides for monthly installments of $457 thousand, including interest of 0.4% through January 31, 2066. Principal and interest payments relating to the capital lease were $565 thousand and $4.9 million, respectively, for the year ended June 30, 2020 and $538 thousand and $4.9 million, respectively, for the year ended June 30, 2019. Accumulated depreciation related to the capital lease was $9.0 million and $7.0 million at June 30, 2020 and 2019, respectively.

7. Debt

In November 2017, the Massachusetts Development Finance Agency (“MDFA”) issued $250.2 million of tax-exempt Revenue Bonds (the “2017 Series”) on behalf of the Institute. The proceeds from the bonds were used to advance refund the Institute’s outstanding 2011 Series A tax-exempt Revenue Bonds.

The 2017 Series Bonds mature in full on April 1, 2041. Interest is payable semiannually, each April 1 and October 1, at an annual rate ranging from 3.0% to 5.0%. The original issue premium (“OIP”) and discount (“OID”) of $40.9 million and $1.0 million, respectively, are being amortized over the life of the 2017 Series Bonds using the effective interest rate method. OIP amortization income for the years ended June 30, 2020 and 2019 was $2.8 million annually. OID amortization expense for the years ended June 30, 2020 and 2019 was $72 thousand and $70 thousand, respectively. These amortization amounts are included in interest expense.

The 2017 Series Bonds maturing on or after April 1, 2028 are subject to optional redemption on or after October 1, 2027 at the direction of the Institute at 100% of their principal amount, plus accrued interest to the redemption date. The 2017 Series Bonds are subject to mandatory redemption beginning on April 1, 2038 and on each April 1 thereafter at their principal amounts without premium, plus accrued interest to the redemption date.

In May 2011, the MDFA issued $83.6 million of federally taxable Revenue Bonds (the “Series B”) on behalf of the Institute. The proceeds from the bonds were used by the Institute to finance the acquisition and construction of a building at 75 Ames Street, certain leasehold and building

17 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

improvements, certain equipment and to repay a July 2010 loan used to finance leasehold improvements. The Series B Bonds matured in full on April 1, 2020.

The 2017 Series Bonds and Series B Bonds require the Institute to comply with certain nonfinancial covenants, including annual reporting requirements.

The following schedule summarizes principal installments due on the 2017 Series Bonds in the next five years and thereafter:

(in thousands of dollars)

2021 $ 12,630 2022 12,530 2023 12,475 2024 12,330 2025 12,235 Thereafter 188,035 Unamortized: Premiums 33,595 Discounts (848) Issuance costs (932) Debt, net$ 282,050

In April 2020, the Institute entered into a credit agreement with a financial institution which provides for a revolving line of credit up $50.0 million. The credit agreement expires in April 2021. Outstanding borrowings bear interest at a LIBOR Daily Floating Rate plus 1.20% (effectively 1.28% at June 30, 2020). There were no outstanding borrowings during the year ending June 30, 2020.

The Institute’s credit agreement requires the Institute to comply with certain nonfinancial covenants, including annual reporting requirements. Such covenants include paying all taxes due on a timely basis and maintaining required insurance limits. It also contains limitations on fundamental business changes, liens, incurrence of additional indebtedness, and prohibits certain dispositions of property.

8. Functional and Natural Classification of Expenses

Expenses have been presented in the statements of activities on a functional basis. The Institute uses direct identification to allocate specific expenses, including those related to payroll, equipment depreciation, and materials and services. Indirect expenses, including costs related to rent expense and the depreciation, operation and maintenance of buildings, are allocated on the basis of square footage utilized by each function.

18 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

Operating and nonoperating expenses by functional and natural classification as of June 30, 2020 and 2019 were as follows:

2020 Management (in thousands of dollars) Research and general Total

Salaries and wages$ 133,977 $ 43,743 $ 177,720 Employee benefits 38,213 7,248 45,461 Materials and services 110,763 39,093 149,856 Rent, utilities, and maintenance 30,522 4,646 35,168 Grants and other assistance 56,899 - 56,899 Depreciation 31,847 3,064 34,911 Interest 12,071 2,181 14,252 Other 1,198 1,966 3,164 Total expenses$ 415,490 $ 101,941 $ 517,431

2019 Management (in thousands of dollars) Research and general Total

Salaries and wages$ 126,355 $ 33,291 $ 159,646 Employee benefits 33,429 5,834 39,263 Materials and services 131,764 36,136 167,900 Rent, utilities, and maintenance 29,980 4,825 34,805 Grants and other assistance 48,497 - 48,497 Depreciation 32,791 3,033 35,824 Interest 12,597 2,299 14,896 Other 2,007 2,028 4,035 Total expenses$ 417,420 $ 87,446 $ 504,866

9. Liquidity and Availability of Resources

The Institute regularly monitors liquidity required to meet its operating needs and other contractual commitments. When reviewing available resources required to meet its expenditures over a 12- month period, the Institute considers all expenditures related to its ongoing activities.

19 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

The following summarizes the financial assets available to meet its general expenditures within one year of the balance sheet date:

(in thousands of dollars) 2020 2019

Financial assets Cash and cash equivalents$ 240,844 $ 249,540 Agency cash 7,739 6,429 Accounts receivable, net 94,233 85,930 Investments 718,364 555,138 Total financial assets, at year-end 1,061,180 897,037 Less those unavailable for general expenditures within 12 months of the balance sheet date Cash and cash equivalents not available for general expenditure (62,321) (52,163) Agency cash (7,739) (6,429) Accounts receivable, collectible beyond one year (1,335) (4,063) Investments restricted by purpose or time beyond one year (655,543) (506,403) Financial assets available to meet cash needs for general expenditures within 12 months of the balance sheet date$ 334,242 $ 327,979

In addition to the financial assets available to meet general expenditures over the next 12 months, a significant portion of the Institute’s annual expenditures will be funded by current year operating revenue from grants, contracts and donations from a variety of federal, private and philanthropic sources. As part of the Institute’s liquidity management strategy, financial assets are structured to be available as its general expenditures, liabilities, and other obligations come due.

10. Commitments and Contingencies

The Institute is the lessee of space under both operating and capital leases. Rent expense relating to leases was $9.4 million and $9.8 million for the years ended June 30, 2020 and 2019, respectively. Future minimum payments under these operating and capital leases are as follows:

(in thousands of dollars) Operating Capital

2021$ 9,262 $ 5,482 2022 9,335 5,482 2023 8,017 5,482 2024 7,790 5,482 2025 4,687 5,482 Thereafter 12,456 222,470 Total lease payments due$ 51,547 $ 249,880

The portion of the future minimum payments under capital leases that represents interest is $150.6 million.

The Institute has made certain purchase commitments not reflected in the statements of financial position at June 30, 2020 and 2019, in the amount of $33.2 million and $24.4 million, respectively, mainly related to purchases of property management services, computing storage, construction, and software.

20 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2020 and 2019

Various legal claims, generally incidental to the conduct of normal business, are pending or have been threatened against the Institute. The Institute plans to defend itself against these claims. While ultimate liability, if any, arising from any such claim is presently undeterminable, it is management’s opinion that the ultimate resolution of these claims will not have a material adverse effect on the financial condition of the Institute.

11. Subsequent Events

The Institute has assessed the impact of subsequent events through October 29, 2020, the date the audited financial statements were issued.

21 Schedule of Expenditures of Federal Awards The Broad Institute, Inc. Schedule of Expenditure of Federal Awards Year Ended June 30, 2020

Federal Grantor/Pass-through Grantor/Program or Cluster Title Award/Pass-through Total Passed Entity Identification CFDA Federal Through to Number Number Expenditures Subrecipients

Research and Development Cluster Department of Health and Human Services National Institutes of Health (NIH) Direct Human Genome Research UM1HG008895 93.172$ 21,840,969 $ - Human Genome Research UM1HG008900 93.172 3,285,131 185,321 Human Genome Research RM1HG006193 93.172 2,673,453 157,239 Human Genome Research R25HG006682 93.172 364,452 - Human Genome Research R01HG008742 93.172 494,603 323,498 Human Genome Research R01HG009276 93.172 729,321 337,879 Human Genome Research UM1HG009390 93.172 2,230,844 210,333 Human Genome Research R01HG009761 93.172 905,198 - Human Genome Research R21HG009749 93.172 101,827 82,246 Human Genome Research U41HG009494 93.172 636,416 - Human Genome Research R01HG009283 93.172 1,222,260 255,607 Human Genome Research UM1HG009435 93.172 2,046,101 1,036,722 Human Genome Research R01HG009141 93.172 1,157,967 732,901 Human Genome Research K99HG009920 93.172 52,760 - Human Genome Research U24HG010262 93.172 6,051,591 3,732,330 Human Genome Research R01HG010647 93.172 680,012 - Human Genome Research K99HG010669 93.172 102,428 - Subtotal - Human Genome Research 44,575,333 7,054,076 Mental Health Research Grants U01MH105641 93.242 16,751 - Mental Health Research Grants U01MH105669 93.242 528,697 - Mental Health Research Grants R01MH110049 93.242 1,098,493 - Mental Health Research Grants R21MH109761 93.242 (160) - Mental Health Research Grants U01MH111660 93.242 348,422 - Mental Health Research Grants R01MH111529 93.242 150,113 171,735 Mental Health Research Grants R01MH111813 93.242 624,871 89,746 Mental Health Research Grants U01MH115727 93.242 4,794,531 1,880,427 Mental Health Research Grants R01MH115045 93.242 699,107 - Mental Health Research Grants R56MH115957 93.242 412,980 138,622 Mental Health Research Grants R37MH107649 93.242 632,861 155,065 Mental Health Research Grants K99MH119327 93.242 120,352 - Mental Health Research Grants U01MH119689 93.242 646,803 87,239 Mental Health Research Grants R01MH115957 93.242 873,334 136,816 Mental Health Research Grants UG3MH120096 93.242 932,637 - Mental Health Research Grants R01MH120642 93.242 398,503 267,447 Mental Health Research Grants RF1MH121289 93.242 78,954 - Mental Health Research Grants R21MH120423 93.242 26,170 - Mental Health Research Grants U01MH121499 93.242 39,183 10,000 Subtotal - Mental Health Research Grants 12,422,602 2,937,097 Discovery and Applied Research for Technological Innovations to Improve Human Health R01EB022376 93.286 15,164 - Subtotal - Discovery and Applied Research for Technological Innovations to Improve Human Health 15,164 - Trans-NIH Research Support U54HG008097 93.310 1,760,399 853,665 Trans-NIH Research Support U01HG008699 93.310 84,632 - Trans-NIH Research Support R01DK113597 93.310 730,297 496,102 Trans-NIH Research Support U24DK112340 93.310 1,764,228 707,275 Trans-NIH Research Support DP5OD024582 93.310 529,817 - Trans-NIH Research Support DP5OD024583 93.310 396,650 - Trans-NIH Research Support DP5OD024590 93.310 449,818 - Trans-NIH Research Support U01AI142756 93.310 436,865 - Trans-NIH Research Support UG3NS111689 93.310 807,404 - Subtotal - Trans-NIH Research Support 6,960,110 2,057,042 National Center for Advancing Translational Sciences OT2TR002584 93.350 655,038 - National Center for Advancing Translational Sciences OT2TR003437 93.350 153,459 - National Center for Advancing Translational Sciences OT2TR003433 93.350 110,551 - Subtotal - National Center for Advancing Translational Sciences 919,048 - Research Infrastructure Programs R24OD018250 93.351 (15,545) - Research Infrastructure Programs S10OD026839 93.351 1,005,313 - Subtotal - Research Infrastructure Programs 989,768 - Cancer Cause and Prevention Research R01CA208756 93.393 569,791 - Cancer Cause and Prevention Research U01CA217848 93.393 1,286,566 - Subtotal - Cancer Cause and Prevention Research 1,856,357 - Cancer Detection and Diagnosis Research R33CA202820 93.394 157,214 137,789 Cancer Detection and Diagnosis Research U24CA210986 93.394 1,607,493 - Cancer Detection and Diagnosis Research U24CA210979 93.394 1,042,506 - Cancer Detection and Diagnosis Research U24CA210978 93.394 560,216 14,714 Cancer Detection and Diagnosis Research U24CA210999 93.394 415,771 - Subtotal - Cancer Detection and Diagnosis Research 3,783,200 152,503 Cancer Treatment Research R01CA219943 93.395 502,830 150,533 Cancer Treatment Research R01CA233626 93.395 425,074 - Subtotal - Cancer Treatment Research 927,904 150,533 Cancer Biology Research U01CA199253 93.396 421,466 268,088 Cancer Biology Research R50CA211461 93.396 339,394 - Cancer Biology Research U24CA180922 93.396 923,071 156,529 Cancer Biology Research R35CA242457 93.396 660,384 - Cancer Biology Research UH3CA246632 93.396 285,795 34,011 Cancer Biology Research R01CA248280 93.396 106,844 - Cancer Biology Research R33CA246455 93.396 5,683 - Subtotal - Cancer Biology Research 2,742,637 458,628 The accompanying note is an integral part of this schedule.

2 The Broad Institute, Inc. Schedule of Expenditure of Federal Awards Year Ended June 30, 2020

Federal Grantor/Pass-through Grantor/Program or Cluster Title Award/Pass-through Total Passed Entity Identification CFDA Federal Through to Number Number Expenditures Subrecipients

Research and Development Cluster Department of Health and Human Services National Institutes of Health (NIH) Direct

Cardiovascular Diseases Research U54HL127366 93.837 1,429,108 - Cardiovascular Diseases Research R01HL131015 93.837 587,186 206,891 Cardiovascular Diseases Research R01HL143295 93.837 1,245,198 260,858 Subtotal - Cardiovascular Diseases Research 3,261,492 467,749 Blood Diseases and Resources Research DP1HL141201 93.839 1,068,018 - Blood Diseases and Resources Research DP2HL141005 93.839 508,876 - Subtotal - Blood Diseases and Resources Research 1,576,894 - Diabetes, Digestive, and Kidney Diseases Extramural Research Diabetes, Digestive, and Kidney Diseases Extramural Research U54DK105566 93.847 103,854 75,336 Diabetes, Digestive, and Kidney Diseases Extramural Research U01DK105554 93.847 4,875,478 3,226,876 Diabetes, Digestive, and Kidney Diseases Extramural Research R01DK105154 93.847 829,400 658,090 Diabetes, Digestive, and Kidney Diseases Extramural Research RC2DK114784 93.847 2,113,722 425,149 Diabetes, Digestive, and Kidney Diseases Extramural Research UC4DK116255 93.847 1,696,510 870,169 Diabetes, Digestive, and Kidney Diseases Extramural Research R24DK110499 93.847 1,489,135 1,171,201 Diabetes, Digestive, and Kidney Diseases Extramural Research DP1DK119139 93.847 251,038 - Diabetes, Digestive, and Kidney Diseases Extramural Research R01DK099465 93.847 325,452 - U01DK123717 93.847 367,635 193,469 Subtotal - Diabetes, Digestive, and Kidney Diseases Extramural Research 12,052,224 6,620,290 Extramural Research Programs in the Neurosciences and Neurological Disorders R24NS092983 93.853 36,223 - Extramural Research Programs in the Neurosciences and Neurological Disorders R01NS100802 93.853 564,026 - Extramural Research Programs in the Neurosciences and Neurological Disorders R21NS110355 93.853 205,120 115,544 Subtotal - Extramural Research Programs in the Neurosciences and Neurological Disorders 805,369 115,544 Allergy and Infectious Diseases Research R01AI114855 93.855 641,326 - Allergy and Infectious Diseases Research R01AI117043 93.855 916,995 251,067 Allergy and Infectious Diseases Research U24AI118668 93.855 292,477 - Allergy and Infectious Diseases Research U24AI118672 93.855 332,065 - Allergy and Infectious Diseases Research F32AI129249 93.855 31,941 - Allergy and Infectious Diseases Research R01AI132300 93.855 991,198 407,014 Allergy and Infectious Diseases Research F32AI138458 93.855 66,724 - Allergy and Infectious Diseases Research R21AI141080 93.855 250,473 161,045 COVID-19 -Allergy and Infectious Diseases Research U19AI110818 93.855 349,995 - Allergy and Infectious Diseases Research U19AI110818 93.855 4,410,316 446,109 Allergy and Infectious Diseases Research U19AI142780 93.855 3,572,522 1,718,779 Subtotal - Allergy, Immunology and Transplantation Research 11,856,032 2,984,014 Biomedical Research and Research Training R35GM122547 93.859 479,699 - Biomedical Research and Research Training R35GM122455 93.859 731,337 39,085 Biomedical Research and Research Training F32GM122261 93.859 57,297 - Biomedical Research and Research Training R35GM118062 93.859 636,592 - Biomedical Research and Research Training R35GM127045 93.859 774,938 - Biomedical Research and Research Training F32GM133088 93.859 50,260 - Biomedical Research and Research Training P41GM135019 93.859 249,084 108,250 Subtotal - Biomedical Research and Research Training 2,979,207 147,335 Child Health and Human Development Extramural Research U24HD090743 93.865 4,092,959 - Child Health and Human Development Extramural Research K99HD096049 93.865 109,042 - Subtotal - Child Health and Human Development Extramural Research 4,202,001 - Aging Research DP2AG058488 93.866 518,360 - Aging Research R21AG067585 93.866 38,451 31,701 Subtotal - Aging Research 556,811 31,701 Vision Research K99EY028625 93.867 51,117 - Subtotal - Vision Research 51,117 - 21st Century Cures Act-Precision Medicine Initiative OT2OD002750 93.368 2,738,720 1,244,008 Subtotal - 21st Century Cures Act-Precision Medicine Initiative 2,738,720 1,244,008 Cancer Research Manpower F32CA232543 93.398 58,095 - Cancer Research Manpower K00CA212229 93.398 87,550 - Cancer Research Manpower F32CA236425 93.398 62,448 - Cancer Research Manpower F32CA247088 93.398 28,537 - Cancer Research Manpower K99CA248610 93.398 37,358 - Subtotal - Cancer Research Manpower 273,988 - NIH National Cancer Institute HHSN261201400006C 93.RD (53,448) - NIH National Cancer Institute 75N91019D00029/75N91019F00129 93.RD 969,169 - Subtotal - National Cancer Institute 915,721 -

NIH National Heart, Lung, and Blood Institute HHSN268201600034I/HHSN26800003 93.RD 9,717,372 1,203,552 Subtotal - NIH National Heart, Lung, and Blood Institute Contracts 9,717,372 1,203,552 Subtotal - National Institutes of Health - Direct 126,179,071 25,624,072 The accompanying note is an integral part of this schedule.

2 The Broad Institute, Inc. Schedule of Expenditure of Federal Awards Year Ended June 30, 2020

Federal Grantor/Pass-through Grantor/Program or Cluster Title Award/Pass-through Total Passed Entity Identification CFDA Federal Through to Number Number Expenditures Subrecipients

Research and Development Cluster Department of Health and Human Services National Institutes of Health (NIH) Pass-through

Human Genome Research - Baylor College of Medicine 7000000566 93.172 171,103 - Human Genome Research - Brigham & Women's Hospital, Inc. 113059 93.172 (295,485) - Human Genome Research - Brigham & Women's Hospital, Inc. 117565 93.172 1,684,293 - Human Genome Research - Brigham & Women's Hospital, Inc. 120118 93.172 131,374 - Human Genome Research - Brigham & Women's Hospital, Inc. 118176 93.172 273,457 - Human Genome Research - Brigham & Women's Hospital, Inc. 119937 93.172 67,573 - Human Genome Research - Redeemer's University U54HG007480 93.172 182,246 - Human Genome Research - University of California, Berkeley 00009717 93.172 420,380 - Human Genome Research - University of California, San Diego 69738003(MP INVOICE # S9001289) 93.172 109,327 - Human Genome Research - University of California, Santa Cruz A18-0045-S001-P0658453 93.172 267,205 - Human Genome Research - University of Louisville Research Foundation, Inc. ULRF 17-0906-03 93.172 74,667 - Subtotal - Human Genome Research 3,086,140 - Mental Health Research Grants - Allen Institute 2017-0565 93.242 628,061 - Mental Health Research Grants - Beth Israel Deaconess Medical Center, Inc. 01028235 93.242 61,481 - Mental Health Research Grants - Brown University 00001548 93.242 38,173 - Mental Health Research Grants - Cold Spring Harbor Laboratory 64580422/64580426/64580428 93.242 4,253,057 - Mental Health Research Grants - Harvard Medical School 153212.5111092.0302 93.242 145,981 - Mental Health Research Grants - Harvard University 132665-5098421 93.242 (1,444) - Mental Health Research Grants - Harvard University 164641-5105238 93.242 130,604 - Mental Health Research Grants - Massachusetts General Hospital 228485 93.242 52,836 - Mental Health Research Grants - Massachusetts General Hospital 236052 93.242 7,091 - Mental Health Research Grants - Massachusetts Institute of Technology 53993 93.242 82,430 - Mental Health Research Grants - University of California, Los Angeles 2000 G TB276 93.242 11,629 - Mental Health Research Grants - University of California, San Diego 78646937 (MP Invoice #S9001451) 93.242 13,309 - Mental Health Research Grants - University of California, San Diego 123556869 / S9002406 93.242 57,208 - Mental Health Research Grants - University of California, San Diego 123833790 MP Invoice/POS9002426 93.242 61,083 - Mental Health Research Grants - University of North Carolina 5100716 93.242 4,727 - Mental Health Research Grants - University of North Carolina 5114874 93.242 12,015 - Subtotal - Mental Health Research Grants 5,558,241 - Drug Abuse and Addiction Research Programs - Yale University GR104821 (CON-80001522) 93.279 102,000 - Drug Abuse and Addiction Research Programs - University of Minnesota P007183804 93.279 69,457 - Subtotal - Drug Abuse and Addiction Research Programs 171,457 - Discovery and Applied Research for Technological Innovations to Improve Human Health - Boston University 4500003124 93.286 323,190 - Subtotal - Discovery and Applied Research for Technological Innovations to Improve Human Health 323,190 - Trans-NIH Research Support - Massachusetts Eye and Ear Infirmary 530096 93.310 26,750 - Trans-NIH Research Support - New York Genome Center OT2-Broad-2 93.310 147,836 - Trans-NIH Research Support - The Jackson Laboratory 210235-0720-02 93.310 5,016 - Trans-NIH Research Support - Vanderbilt University Medical Center VUMC59306 93.310 4,225,188 - Trans-NIH Research Support - Vanderbilt University Medical Center VUMC70571 93.310 570,264 - Subtotal - Trans-NIH Research Support 4,975,054 - National Center for Advancing Translational Sciences - Massachusetts General Hospital 235429 93.350 134,014 - Subtotal - National Center for Advancing Translational Sciences 134,014 - 21st Century Cures Act - Beau Biden Cancer Moonshot - Boston University 4500003042 93.353 133,596 - 21st Century Cures Act - Beau Biden Cancer Moonshot - Boston University 4500002988 93.353 65,749 - 21st Century Cures Act - Beau Biden Cancer Moonshot - Dana Farber Cancer Institute 1195708 93.353 198,836 - 21st Century Cures Act - Beau Biden Cancer Moonshot - - Dana Farber Cancer Institute 1250103 93.353 428,528 - 21st Century Cures Act - Beau Biden Cancer Moonshot - Dana Farber Cancer Institute 1206202 93.353 220,079 - 21st Century Cures Act - Beau Biden Cancer Moonshot - Dana Farber Cancer Institute 1206302 93.353 242,750 - 21st Century Cures Act - Beau Biden Cancer Moonshot - Dana Farber Cancer Institute 12062402 93.353 86,951 - 21st Century Cures Act - Beau Biden Cancer Moonshot - - Massachusetts General Hospital 231617 93.353 18,356 - Subtotal - 21st Century Cures Act - Beau Biden Cancer Moonshot 1,394,845 - Nursing Research - Massachusetts General Hospital 233238 93.361 213,306 - Subtotal - Nursing Research 213,306 -

The accompanying note is an integral part of this schedule.

2 The Broad Institute, Inc. Schedule of Expenditure of Federal Awards Year Ended June 30, 2020

Federal Grantor/Pass-through Grantor/Program or Cluster Title Award/Pass-through Total Passed Entity Identification CFDA Federal Through to Number Number Expenditures Subrecipients

Research and Development Cluster Department of Health and Human Services National Institutes of Health (NIH) Pass-through Cancer Cause and Prevention Research - Brigham & Women's Hospital, Inc. 112786 93.393 122,139 - Cancer Cause and Prevention Research - Dana Farber Cancer Institute 1299904 93.393 5,300 - Cancer Cause and Prevention Research - Dana Farber Cancer Institute 1248003 93.393 92,334 - Cancer Cause and Prevention Research - Dana Farber Cancer Institute 1217707 93.393 187,622 - Cancer Cause and Prevention Research - Duke University A032774 93.393 54,673 - Cancer Cause and Prevention Research - Harvard School of Public Health 111170-5081528 93.393 6,703 - Cancer Cause and Prevention Research - University of California, Santa Cruz A20-0145-S002 P0726831 93.393 8,036 - Cancer Cause and Prevention Research - Uppsala University 5R01CA225755-02 93.393 56,740 - Subtotal - Cancer Cause and Prevention Research 533,547 - Cancer Detection and Diagnosis Research - - Baylor College of Medicine 7000000403 93.394 1,128,890 - Cancer Detection and Diagnosis Research - Baylor College of Medicine 7000000617 93.394 92,692 - Cancer Detection and Diagnosis Research - Dana Farber Cancer Institute 1196209 93.394 998 - Cancer Detection and Diagnosis Research - Dana Farber Cancer Institute 1168603 93.394 87,371 - Cancer Detection and Diagnosis Research - Massachusetts General Hospital 227914 93.394 113,043 - Subtotal - Cancer Detection and Diagnostic Research 1,422,994 - Cancer Treatment Research - Dana Farber Cancer Institute 1284604 93.395 191,687 - Cancer Treatment Research - Dana Farber Cancer Institute 1288102 93.395 9,776 - Cancer Treatment Research - Massachusetts General Hospital 227448 93.395 (10,888) - Cancer Treatment Research - University of Massachusetts, Worcester OSP2018092 93.395 579,182 - Subtotal - Cancer Treatment Research 769,757 - Cancer Biology Research - Dana Farber Cancer Institute 1225705 93.396 (69,598) - Cancer Biology Research - Dana Farber Cancer Institute 1212309 93.396 233,203 - Cancer Biology Research - University of California, San Diego 82780303 (S9001606) 93.396 190,176 - Cancer Biology Research - University of California, San Diego 103441795 (MP Invoice# S9001988) 93.396 121,247 - Subtotal - Cancer Biology Research 475,028 -

The accompanying note is an integral part of this schedule.

2 The Broad Institute, Inc. Schedule of Expenditure of Federal Awards Year Ended June 30, 2020

Federal Grantor/Pass-through Grantor/Program or Cluster Title Award/Pass-through Total Passed Entity Identification CFDA Federal Through to Number Number Expenditures Subrecipients

Research and Development Cluster Department of Health and Human Services National Institutes of Health (NIH) Pass-through

Cancer Centers Support Grants - Beth Israel Deaconess Medical Center, Inc. 01060256 93.397 (801) - Subtotal - Cancer Centers Support Grants (801) - Cardiovascular Diseases Research - Beth Israel Deaconess Medical Center, Inc. 01061467 93.837 36,056 - Cardiovascular Diseases Research - Beth Israel Deaconess Medical Center, Inc. 01061857 93.837 13,441 - Cardiovascular Diseases Research - Brigham & Women's Hospital, Inc. 113892 93.837 200,476 - Cardiovascular Diseases Research - Harvard School of Public Health 111260-5104996 93.837 264,756 - Cardiovascular Diseases Research - Harvard School of Public Health 111246-5103429 93.837 382,392 - Cardiovascular Diseases Research - Massachusetts General Hospital 236185 93.837 26,634 - Cardiovascular Diseases Research - Massachusetts General Hospital 226405 93.837 13,253 - Cardiovascular Diseases Research - Massachusetts General Hospital 230189 93.837 238,840 - Cardiovascular Diseases Research - Massachusetts General Hospital 227547 93.837 199,892 - Cardiovascular Diseases Research - Massachusetts General Hospital 234357 93.837 66,634 - Cardiovascular Diseases Research - Massachusetts General Hospital 231873 93.837 187,771 - Cardiovascular Diseases Research - Seven Bridges Genomics, Inc. 1 OT3 HL142478-01 93.837 53,030 - Cardiovascular Diseases Research - University of California, Santa Cruz A18-0757-S001-P0654931 93.837 1,120,429 - Cardiovascular Diseases Research - University of Illinois 16791 93.837 110,948 - Cardiovascular Diseases Research - University of Mississippi Medical Center 66108920219-BR 93.837 1,728 - Cardiovascular Diseases Research - University of North Carolina 5116787 93.837 14,059 - Cardiovascular Diseases Research - University of Washington UWSC11248 93.837 3,710 - Subtotal - Cardiovascular Diseases Research 2,934,049 - Lung Diseases Research - Brigham & Women's Hospital, Inc. 111050 93.838 (14,246) - Lung Diseases Research - Cincinnati Children's Hospital Medical Center 308750 93.838 101,484 - Lung Diseases Research - Cincinnati Children's Hospital Medical Center 311013 93.838 118,964 - Subtotal - Lung Diseases Research 206,202 - Blood Diseases and Resources Research - Dana Farber Cancer Institute 1169214 93.839 458,687 - Blood Diseases and Resources Research - Feinstein Institute for Medical Research AWD00001008-Broad 93.839 101,030 - Blood Diseases and Resources Research - Fred Hutchinson Cancer Research Center 0001028678 93.839 66,966 - Subtotal - Blood Diseases and Resources Research 626,683 -

The accompanying note is an integral part of this schedule.

2 The Broad Institute, Inc. Schedule of Expenditure of Federal Awards Year Ended June 30, 2020

Federal Grantor/Pass-through Grantor/Program or Cluster Title Award/Pass-through Total Passed Entity Identification CFDA Federal Through to Number Number Expenditures Subrecipients

Research and Development Cluster Department of Health and Human Services National Institutes of Health (NIH) Pass-through

Arthritis, Musculoskeletal and Skin Diseases Research - Brigham & Women's Hospital, Inc. 111166 93.846 1,339 - Arthritis, Musculoskeletal and Skin Diseases Research - Brigham & Women's Hospital, Inc. 111565 93.846 41,496 - Arthritis, Musculoskeletal and Skin Diseases Research - Feinstein Institute for Medical Research 500679-BI 93.846 326,713 - Arthritis, Musculoskeletal and Skin Diseases Research - Feinstein Institute for Medical Research 500678-BI 93.846 398,005 - Arthritis, Musculoskeletal and Skin Diseases Research - Hebrew Rehabilitation Center 90094 93.846 122,197 - Subtotal - Arthritis, Musculoskeletal and Skin Diseases Research 889,750 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Albert Einstein College 311433 93.847 203,258 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Beth Israel Deaconess Medical Center, Inc. 01029357 93.847 46,489 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Beth Israel Deaconess Medical Center, Inc. 01061307 93.847 21,831 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Children's Hospital Boston GENFD0001715370 93.847 348,156 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Harvard University 153277.5107749.0003 93.847 288,465 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Harvard University 164623-5098793 93.847 94,950 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Massachusetts General Hospital 226082 93.847 156,546 126,451 Diabetes, Digestive, and Kidney Diseases Extramural Research - Massachusetts General Hospital 227036 93.847 257,414 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Massachusetts General Hospital 228238 93.847 136,960 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Massachusetts General Hospital 230582 93.847 22,001 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Massachusetts General Hospital 231096 93.847 28,162 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Massachusetts General Hospital 233311 93.847 298,043 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Tulane University TUL-HSC-554002-16/17 93.847 (7,181) - Diabetes, Digestive, and Kidney Diseases Extramural Research - University of Chicago FP068366-01A 93.847 123,865 - Diabetes, Digestive, and Kidney Diseases Extramural Research - University of Michigan 3004659528 93.847 113,881 - Diabetes, Digestive, and Kidney Diseases Extramural Research - University of South Florida 6163-1042-00-BD 93.847 295,356 - Subtotal - Diabetes, Digestive, and Kidney Diseases Extramural Research 2,428,196 126,451

The accompanying note is an integral part of this schedule.

2 The Broad Institute, Inc. Schedule of Expenditure of Federal Awards Year Ended June 30, 2020

Federal Grantor/Pass-through Grantor/Program or Cluster Title Award/Pass-through Total Passed Entity Identification CFDA Federal Through to Number Number Expenditures Subrecipients

Research and Development Cluster Department of Health and Human Services National Institutes of Health (NIH) Pass-through Extramural Research Programs in the Neurosciences and Neurological Disorders - Harvard School of Public Health 111186-5090004 93.853 18,413 - Extramural Research Programs in the Neurosciences and Neurological Disorders - Massachusetts General Hospital 232364 93.853 782,630 - Extramural Research Programs in the Neurosciences and Neurological Disorders - Massachusetts General Hospital 231500 93.853 10,073 - Extramural Research Programs in the Neurosciences and Neurological Disorders - Massachusetts General Hospital 234234 93.853 10,232 - Extramural Research Programs in the Neurosciences and Neurological Disorders - Massachusetts General Hospital 235828 93.853 25,689 - Extramural Research Programs in the Neurosciences and Neurological Disorders - Northwestern University 60051734 BI 93.853 220,851 - Extramural Research Programs in the Neurosciences and Neurological Disorders - Northwestern University 60051733 BI 93.853 381,843 - Extramural Research Programs in the Neurosciences and Neurological Disorders - Yale University GR105126 (CON-80001623) 93.853 57,049 - Subtotal - Extramural Research Programs in the Neurosciences and Neurological Disorders 1,506,780 - Allergy and Infectious Diseases Research - Beth Israel Deaconess Medical Center, Inc. 01061849 93.855 200,338 - Allergy and Infectious Diseases Research - Brigham & Women's Hospital 112673 93.855 93,735 - Allergy and Infectious Diseases Research - Brigham & Women's Hospital 116146 93.855 74,350 - Allergy and Infectious Diseases Research - Emory University A319140 93.855 5,912 - Allergy and Infectious Diseases Research - Harvard University 152414.5103475.0302 93.855 134,802 - Allergy and Infectious Diseases Research - Harvard University 152416.5102753.0019 93.855 114,152 - Allergy and Infectious Diseases Research - Harvard University 152414.5103477.0304 93.855 303,645 - Allergy and Infectious Diseases Research - Harvard University 152414.5103479.0303 93.855 417,572 - Allergy and Infectious Diseases Research - Harvard School of Public Health 109724-5092640 93.855 133,559 - Allergy and Infectious Diseases Research - Icahn School of Medicine at Mount Sinai 0255-B131-4609 93.855 448,108 - Allergy and Infectious Diseases Research - Massachusetts General Hospital 224614 93.855 (17,666) - Allergy and Infectious Diseases Research - Massachusetts General Hospital 234208 93.855 32,520 - Allergy and Infectious Diseases Research - Massachusetts General Hospital 234444 93.855 155,403 - Allergy and Infectious Diseases Research - Massachusetts General Hospital 234408 93.855 33,815 - Allergy and Infectious Diseases Research - Radboud University Medical Center S18-0053-2 93.855 70,998 - Allergy and Infectious Diseases Research - The University of Texas Southwestern Medical Center GMO 190409 PO# 000001720A 93.855 916,691 - Allergy and Infectious Diseases Research - The Washington University WU-16-281-MOD-3 93.855 17,145 - Allergy and Infectious Diseases Research - The Washington University WU-20-380 93.855 10,521 - Allergy and Infectious Diseases Research - Tufts University 102222-00001/NIH010 93.855 (16,136) - Allergy and Infectious Diseases Research - Tufts University 102222-00001/NIH062 93.855 49,429 - Allergy and Infectious Diseases Research - University of California, San Francisco 9436sc 93.855 (6,044) - Allergy and Infectious Diseases Research - University of Pittsburgh CNVA00059942 (131616-1) 93.855 287,608 - Allergy and Infectious Diseases Research - Yale University GK000516 (CON-80000577) 93.855 279,316 - Allergy and Infectious Diseases Research - Yale University GR108220 (CON-80002159) 93.855 242,907 - Subtotal - Allergy, Immunology and Transplantation Research 3,982,680 - Biomedical Research and Research Training - Brigham & Women's Hospital, Inc. 113113 93.859 184,333 - Biomedical Research and Research Training - Harvard University 164629-5100328 93.859 538,958 - Biomedical Research and Research Training - University of California, San Diego 69928063(S9001293) 93.859 97,396 - Subtotal - Biomedical Research and Research Training 820,687 -

The accompanying note is an integral part of this schedule.

2 The Broad Institute, Inc. Schedule of Expenditure of Federal Awards Year Ended June 30, 2020

Federal Grantor/Pass-through Grantor/Program or Cluster Title Award/Pass-through Total Passed Entity Identification CFDA Federal Through to Number Number Expenditures Subrecipients

Research and Development Cluster Department of Health and Human Services National Institutes of Health (NIH) Pass-through

Child Health and Human Development Extramural Research - Cincinnati Children's Hospital Medical Center 304848 93.865 23,573 - Child Health and Human Development Extramural Research - Harvard Pilgrim Health Care, Inc. PH000681B 93.865 321,210 - Child Health and Human Development Extramural Research - John Hopkins University 2003250208 93.865 129,360 - Child Health and Human Development Extramural Research - Massachusetts General Hospital 225991 93.865 139,793 - Subtotal - Child Health and Human Development External Research 613,936 - Aging Research - Columbia University 2(GG012083-01) 93.866 14,221 - Aging Research - Columbia University 4(GG012046) 93.866 746,755 - Aging Research - Columbia University Medical Center 6(GG012040-01) 93.866 104,602 - Aging Research - Massachusetts General Hospital 232963 93.866 353,944 - Aging Research - Massachusetts General Hospital 231823 93.866 105,003 - Aging Research - Massachusetts General Hospital 234056 93.866 126,466 - Aging Research - Massachusetts Institute of Technology 5710004214 93.866 407,908 - Subtotal - Aging Research 1,858,899 - Vision Research - Children's Hospital Boston GENFD0001869542 93.867 174,688 - Vision Research - Icahn School of Medicine at Mount Sinai 0255-B321-4609 93.867 8,869 - Vision Research - Massachusetts Eye and Ear Infirmary 530038 93.867 76,362 - Subtotal - Vision Research 259,919 - NIH National Cancer Institute Leidos Biomedical Research, Inc. 15X054 93.RD 3,862,121 - Leidos Biomedical Research, Inc. 16Q042 93.RD 2,212,053 818,181 Leidos Biomedical Research, Inc. 17X149 93.RD 1,760,130 33,694 Leidos Biomedical Research, Inc. 17X149-Q2 93.RD 4,663,669 3,440,401 Leidos Biomedical Research, Inc. 17X149Q5 93.RD 198,375 - Leidos Biomedical Research, Inc. 17X149TO7 93.RD 43,845 - Subtotal - NIH National Cancer Institute Contracts 12,740,193 4,292,276 NIH National Institute of Environmental Health Sciences Social & Scientific Systems, Inc. PHR-SSS-S-19-005643 93.RD 3,410,100 - Subtotal - NIH National Institute of Environmental Health Sciences 3,410,100 - Total - National Institutes of Health - Pass-through 51,334,846 4,418,727 Subtotal - National Institutes of Health 177,513,917 30,042,799 Food and Drug Administration Direct Food and Drug Administration HHSF223201810172C 93.RD 931,022 - Subtotal - Food and Drug Administration 931,022 - Subtotal - Department of Health and Human Services Food and Drug Administration - Direct 931,022 - Centers for Disease Control and Prevention Pass-through Prevention of Disease, Disability, and Death by Infectious Diseases - Massachusetts General Hospital 231295 93.084 523,898 - Subtotal - Prevention of Disease, Disability, and Death by Infectious Diseases 523,898 - Subtotal - Department of Health and Human Services Centers for Disease Control and Prevention - Pass-through 523,898 - Office of Assistant Secretary for Preparedness and Response Pass-through Biomedical Advanced Research and Development Authority Biodefense Medical Countermeasure Development - Boston University 4500002903 93.360 ______224,233 ______210,519 _ Subtotal - Biomedical Advanced Research and Development Authority, Biodefense Medical Countermeasure Development 224,233 210,519 Subtotal - Department of Health and Human Services Office of Assistant Secretary for Preparedness and Response - Pass-through 224,233 210,519

The accompanying note is an integral part of this schedule.

2 The Broad Institute, Inc. Schedule of Expenditure of Federal Awards Year Ended June 30, 2020

Federal Grantor/Pass-through Grantor/Program or Cluster Title Award/Pass-through Total Passed Entity Identification CFDA Federal Through to Number Number Expenditures Subrecipients

Research and Development Cluster National Aeronautics and Space Administration Direct Science 80NSSC18K1062 43.001 245,329 - Subtotal - Science 245,329 - Space Operations 80NSSC19K0922 43.007 4,887 - Subtotal - Space Operations 4,887 - Subtotal - National Aeronautics and Space Administration - Direct 250,216 - National Science Foundation Pass-through

COVID-19 - Biological Sciences - University of Massachusetts, Worcester OSP33356-00 47.074 8,147 - Subtotal - Biological Sciences 8,147 - Subtotal - National Science Foundation - Pass-through 8,147 - Department of Energy Pass-through

Sandia National Laboratories 2023629 81.RD 5,000 - Subtotal - Sandia National Laboratories 5,000 - Subtotal - Department of Energy - Pass-through 5,000 - Department of Defense Direct

Military Medical Research and Development W81XWH-16-1-0316 12.420 73,558 - Military Medical Research and Development W81XWH1810294 12.420 2,593,800 2,527,463 Military Medical Research and Development W81XWH-18-1-0809 12.420 152,256 18,428 Military Medical Research and Development W81XWH1910271 12.420 192,956 - Subtotal - Military Medical Research and Development 3,012,570 2,545,891 Research and Technology Development N66001-17-2-4055 12.910 1,268,573 260,529 COVID-19 - Research and Technology Development D18AC00006 12.910 45,988 - Research and Technology Development D18AC00006 12.910 1,138,959 - Research and Technology Development N660011824502 12.910 516,177 - Subtotal - Research and Technology Development 2,969,697 260,529 Subtotal - Department of Defense - Direct 5,982,267 2,806,420 Department of Defense Pass-through

Military Medical Research and Development - Dana Farber Cancer Institute, Inc. 3086401 12.420 29,115 - Military Medical Research and Development - Harvard School of Public Health 111266-5107791 12.420 8,116 - Military Medical Research and Development - Henry M. Jackson Foundation 3332 12.420 (128,605) - Military Medical Research and Development - Henry M. Jackson Foundation 4631 12.420 268,987 - Subtotal - Military Medical Research and Development 177,613 - Research and Technology Development - Massachusetts Institute of Technology S4599-003 12.910 1,976,292 - Research and Technology Development - Massachusetts Institute of Technology S4595-002 12.910 81,762 - Subtotal - Research and Technology Development 2,058,054 - Subtotal - Department of Defense - Pass-through 2,235,667 - Subtotal - Department of Defense 8,217,934 2,806,420 Office of the Director of National Intelligence Direct Intelligence Advanced Research Projects Activity 2019-19081900002 99.RD 3,205,171 2,281,960 Subtotal - Intelligence Advanced Research Projects Activity 3,205,171 2,281,960 Subtotal - Office of the Director of National Intelligence - Direct 3,205,171 2,281,960 Total Research and Development Cluster  1,698 Total Expenditures of Federal Awards $ 19 ,8, $ 3,1,698

The accompanying note is an integral part of this schedule.

 The BUoad Institute, Inc. Note to Schedule of Expenditures of Federal Awards June 30, 2020

1. Basis of Presentation

The information in the accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant transactions of The Broad Institute, Inc. (the “Institute”), and was prepared using the accrual basis of accounting. For the year ended June 30, 2020, the Institute converted from a cash basis presentation to the accrual basis. As a result of this change, $8.3 million of expenditures included in the June 30, 2020 Schedule pertain to the June 30, 2019 Schedule had the accrual basis had been adopted that year. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, (Uniform Guidance). The Instituteapplies its predetermined approved facilities and administrative rate when charging indirect costs tofederal awards rather than the 10% de minimis cost rate as described in Section 200.414 of theUniform Guidance.

For purposes of the Schedule, federal awards include all grants, contracts and similar agreements entered into directly between the Institute and agencies and departments of the federal government and all sub-awards to the Institute by nonfederal organizations pursuant to federal grants, contracts and similar agreements. Since the Schedule presents only a selected portion of activities of the Institute, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Institute.

Negative numbers in the Schedule represent adjustments to amounts reported in prior years in the normal course of business. CFDA numbers and pass-through numbers are provided when available.

3 PART II - Reports on Internal Controls and Compliance

Report of Independent Auditors on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

To the Board of Directors of The Broad Institute, Inc.

We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the consolidated financial statements of The Broad Institute, Inc. and its subsidiary (the “Institute”), which comprise the consolidated statement of financial position as of June 30, 2020 and the related consolidated statements of activities and of cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated October 29, 2020, which included an emphasis of matter paragraph related to the Institute changing the manner in which it presents a cash balance included within investments in the consolidated statements of cash flows in fiscal year 2020 as discussed on Note 2.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Institute’s internal control over financial reporting (“internal control”) as a basis for designing the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Institute’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Institute’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Institute’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

PricewaterhouseCoopers LLP, 101 Seaport Boulevard, Suite 500, Boston, Massachusetts 02210 T: 617 530 5000, www.pwc.com/us

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Boston, Massachusetts October 29, 2020

33

Report of Independent Auditors on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with the Uniform Guidance

To the Board of Directors of The Broad Institute, Inc.

Report on Compliance for Each Major Federal Program

We have audited The Broad Institute, Inc. and its subsidiary’s (the “Institute”) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Institute’s major federal programs for the year ended June 30, 2020. The Institute’s major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.

Management’s Responsibility

Management is responsible for compliance with federal statutes, regulations and the terms and conditions of its federal awards applicable to its federal programs.

Auditors’ Responsibility

Our responsibility is to express an opinion on compliance for each of the Institute’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Institute’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Institute’s compliance.

Opinion on Each Major Federal Program

In our opinion, The Broad Institute, Inc. and its subsidiary complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020.

Other Matters

The results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with the Uniform Guidance and which is described in the accompanying schedule of findings and questioned costs as item 2020-001. Our opinion on each major federal program is not modified with respect to this matter.

PricewaterhouseCoopers LLP, 101 Seaport Boulevard, Suite 500, Boston, Massachusetts 02210 T: 617 530 5000, www.pwc.com/us

The Institute's response to the noncompliance finding identified in our audit is described in the accompanying management’s views and corrective action plan. The Institute's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

Report on Internal Control Over Compliance

Management of the Institute is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Institute’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Institute’s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Boston, Massachusetts October 29, 2020

35 Part III – Findings and Questioned Costs The Broad Institute, Inc. Schedule of Findings and Questioned Costs Year Ended June 30, 2020

Section I – Summary of Auditor’s Results Financial Statements Type of auditor’s report issued: Unmodified2SLQLRQ Internal control over financial reporting:

Material weakness(es) identified? yes X no

Significant deficiency(ies) identified that are not considered to be material weaknesses? yes X none reported

Noncompliance material to financial statements noted? yes X no

Federal Awards

Internal control over major programs:

Material weakness(es) identified? yes X no

Significant deficiency(ies) identified that are not considered to be material weaknesses? yes X none reported

Type of auditor’s report issued on compliance for major programs: Unmodified2SLQLRQ

Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? X yes no

Identification of major programs:

CFDA Number Name of Federal Program or Cluster

Various Research and Development Cluster

Dollar threshold used to distinguish between type A and type B programs: $3,000,000

Auditee qualified as low-risk auditee? X yes no

3 The Broad Institute, Inc. Schedule of Findings and Questioned Costs Year Ended June 30, 2020

Section II – Financial Statement Findings

None noted.

3 The Broad Institute, Inc. Schedule of Findings and Questioned Costs Year Ended June 30, 2020

Section III - Federal Award Findings and Questioned Costs

2020-001 Schedule of Expenditures of Federal Awards Cluster: Research & Development Grantor: All Awards Award Name: All Awards Award Year: FY2020 CFDA Numbers: Research & Development

Criteria

2 CFR § 200.510 - Financial statements states the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. These costs must be allowable per grant agreements.

Condition

In examining 21 grants for testing of budgeted costs to actual costs incurred during the fiscal period, we noted one grant reported costs over the approved budget as of the fiscal year end. As a result, $29,348 of total expenditures for this grant exceeded grant limits, and this amount was inappropriately included on the Schedule of Expenditures of Federal Awards (“SEFA”). After an additional review by management, they identified $170,530 within eight other grants that also had expenditures reported in excess of budget amounts and were inappropriately included on the SEFA. None of the expenditures reported were submitted for reimbursement. As a result of our audit procedures and management’s review, management subsequently transferred these off of the SEFA for fiscal year 2020.

Cause

Management requires all costs to be reviewed and reconciled to the approved budget prior to reimbursement during an award’s budget period. However, all identified unallowable expenses are not transferred out prior to the preparation of the SEFA.

Effect

The SEFA may be overstated by unallowable costs.

Questioned Costs

None noted. While the SEFA was overstated for certain grants, these expenses were not submitted by the Institute for reimbursement from the federal government.

Recommendation

We recommend management add an additional review as part of the preparation of the SEFA which reconciles all expenditures to approved budgets within the fiscal period.

Management’s Views and Corrective Action Plan

Management’s views and corrective action plan are included at the end of this report after the summary of status of prior audit findings.

3 The Broad Institute, Inc. Summary Schedule of Prior Audit Findings Year Ended June 30, 2020

There are no findings from prior years that require an update in this report.

3 415 Main Street Cambridge, MA 02142 T 617-714-7000 F 617-714-8972 www.broadinstitute.org

Management’s Views and Corrective Action Plan For the Fiscal Year Ended June 30, 2020

Finding 2020-001: Schedule of Expenditures of Federal Awards

Compliance Requirement: Reporting (L)

Management agrees with the recommendation. We have established regular financial monitoring processes for all awards that include (a) monthly financial reporting to Principal Investigators and (b) a formal monthly review meeting among cross-functional finance staff and leadership, both of which are designed to prevent or promptly remediate over expenditures. These processes enabled us to identify the awards described in the auditor’s report as requiring remediation. However, we did not monitor sufficiently to ensure the completion of remediation efforts prior to the generation of the Schedule of Expenditures of Federal Awards (“SEFA”). Of the 312 awards and $191 million in total expenditures reported on the Broad Institute’s FY20 SEFA, nine awards with total over expenditures of approximately $200,000 were initially reported incorrectly. While we believe our review processes are generally effective, we will implement better monitoring and validation controls to ensure proper SEFA reporting on a fiscal year basis.

In order to prevent a similar occurrence in the future, we will implement an additional review step to reconcile all expenditures to approved budgets as of June 30th, and a validation procedure to confirm that all remediation efforts are complete and accurate prior to the preparation of the SEFA.

Anticipated Completion Date: June 30, 2021

Issue Coordinators:

Kathryn Link Senior Director of Sponsored Research [email protected] 617-714-8787

Brian Donaldson Controller [email protected] 617-714-8266