The Broad Institute, Inc. Report on Federal Awards in Accordance with the Uniform Guidance For the Year Ended June 30, 2019 EIN # 26-3428781

The Broad Institute, Inc. Index Year Ended June 30, 2019

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 ...... 3–22

Schedule of Expenditures of Federal Awards ...... 23–29

Note to Schedule of Expenditures of Federal Awards ...... 30

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 ...... 31–32

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 ...... 33–34

Part III - Findings and Questioned Costs

Schedule of Findings and Questioned Costs ...... 35

Summary Schedule of Prior Audit Findings ...... 36

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 subsidiaries (the “Institute”), which comprise the consolidated statements of financial position as of June 30, 2019 and 2018, and the related consolidated statements of activities and 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 subsidiaries as of June 30 2019 and 2018 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.

PricewaterhouseCoopers LLP, 101 Seaport Boulevard, Suite 500, Boston, MA 02210 T: (617) 530 5000, F: (617) 530 5001, www.pwc.com/us

Emphasis of Matter As discussed in Note 2 to the consolidated financial statements, the Institute changed the manner in which it presents net assets and reports certain aspects of its financial statements as a not-for-profit entity in 2019. Our opinion is not modified with respect to this matter. 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, 2019 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. As described in Note 1 to the schedule of expenditures of federal awards, the accompanying schedule of expenditures of federal awards was prepared on the cash basis, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America. 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, on the basis of accounting described in Note 1, in relation to the consolidated financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 30, 2019 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, 2019. 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 30, 2019

2 The Broad Institute, Inc. Consolidated Statements of Financial Position June 30, 2019 and 2018

(in thousands of dollars) 2019 2018

Assets Cash and cash equivalents$ 249,540 $ 235,812 Agency cash (Note 2) 6,429 5,283 Accounts receivable, net 85,930 72,225 Materials and supplies inventory (Note 2) 18,011 10,553 Prepaid expenses and other assets, net 25,370 22,194 Deposits with trustee (Note 2) 646 772 Pledges receivable, net (Note 3) 186,982 246,168 Beneficial interest in trust (Note 2) 26,526 12,381 Investments (Note 5) 555,138 514,803 Property, plant and equipment, net (Note 7) 418,697 430,978 Total assets$ 1,573,269 $ 1,551,169 Liabilities Accounts payable$ 12,179 $ 11,283 Accrued expenses and other liabilities 122,312 135,438 Agency funds payable (Note 2) 6,429 5,283 Advance payments (Note 2) 48,827 52,908 Capital lease obligation (Note 7) 99,852 100,390 Debt, net (Note 8) 297,291 312,500 Total liabilities 586,890 617,802 Commitments and contingencies (Note 11) Net assets Without donor restrictions 217,123 170,950 With donor restrictions 769,256 762,417 Total net assets 986,379 933,367 Total liabilities and net assets$ 1,573,269 $ 1,551,169

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, 2019 and 2018

2019 2018 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$ 358,574 $ 34,242 $ 392,816 $ 290,399 $ - $ 290,399 Endowment returns made available for operations (Note 4) 28,839 - 28,839 28,346 - 28,346 Fees and services 42,490 - 42,490 42,161 - 42,161 Contributions, net 1,455 69,516 70,971 1,255 98,801 100,056 Other income 16,796 - 16,796 5,166 - 5,166 Net assets released from restrictions 98,933 (98,933) - 101,311 (101,311) - Total revenues and other support 547,087 4,825 551,912 468,638 (2,510) 466,128 Expenses Research 417,420 - 417,420 393,950 - 393,950 Management and general 87,446 - 87,446 73,259 - 73,259 Total operating expenses 504,866 - 504,866 467,209 - 467,209 Income (loss) from operations 42,221 4,825 47,046 1,429 (2,510) (1,081) Nonoperating activities Nonoperating gains (losses) Investment return, net 3,952 16,708 20,660 5,977 31,163 37,140 Loss on refunding of debt - - - (26,002) - (26,002) Change in beneficial interest in trust - 14,145 14,145 - (617) (617) Endowment returns made available for operations (Note 4) - (28,839) (28,839) - (28,346) (28,346) Total nonoperating gains (losses), net 3,952 2,014 5,966 (20,025) 2,200 (17,825) Increase (decrease) in net assets 46,173 6,839 53,012 (18,596) (310) (18,906) Net assets Beginning of year 170,950 762,417 933,367 189,546 762,727 952,273

End of year$ 217,123 $ 769,256 $ 986,379 $ 170,950 $ 762,417 $ 933,367

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

4 The Broad Institute, Inc. Consolidated Statements of Cash Flows Years Ended June 30, 2019 and 2018

(in thousands of dollars) 2019 2018

Cash flows from operating activities Increase (decrease) in net assets$ 53,012 $ (18,906) Adjustments to reconcile change in net assets to net cash provided by operating activities Depreciation 35,824 37,880 Amortization (2,709) (1,614) Pledge discount 273 (807) Provision for bad debts 571 413 Realized and unrealized gains, net (13,937) (32,408) Loss (gain) on disposal of equipment, net 222 (1,546) Loss on refunding of debt - 26,002 Change in beneficial interest in trust (14,145) 617 Change in investments held on the behalf of beneficial interest in trust (3,708) (6,129) Change in investments held on the behalf of Members - (228) Contributions used for long-term investments (55,926) (33,495) Donated equipment (368) - Change in operating assets and liabilities Pledges receivable 58,913 54,457 Accounts receivable (14,276) (26,481) Materials and supplies inventory (7,458) 3,935 Prepaid expenses and other assets (3,176) 5,737 Agency cash (1,146) (5,196) Accounts payable 1,572 3,668 Accrued expenses and other liabilities (11,602) 59,365 Agency funds payable 1,146 5,196 Advance payments (4,081) 3,852 Net cash provided by operating activities 19,001 74,312 Cash flows from investing activities Purchase of property, plant and equipment (22,710) (27,814) Proceeds from sale of equipment 43 279 Deposits with trustee 126 (146) Purchase of investments (61,262) (36,151) Proceeds from sale of investments 35,642 34,982 Net cash used in investing activities (48,161) (28,850) Cash flows from financing activities Payments on capital leases (538) (512) Payments on debt (12,500) (12,500) Contributions used for long-term investments 55,926 33,495 Net cash provided by financing activities 42,888 20,483 Net increase in cash and cash equivalents 13,728 65,945 Cash and cash equivalents Beginning of year 235,812 169,867 End of year$ 249,540 $ 235,812

Supplemental information Capital expenditures accrued$ 3,054 $ 2,324 Cash paid for interest 17,750 19,520 Notes receivable settlement from marketable securities - 34,853 Due to Members settled with marketable securities 2,930 5,044 Noncash financing activities (executed by a third party trustee) Issuance of 2017 Series debt$ - $ 290,091 Payment of 2011 Series A debt - 262,785 Debt issuance costs - 1,304

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, 2019 and 2018

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. In order 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 affiliate, 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, 2019 and 2018

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.

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, 2019 and 2018 were $3.6 million and $3.7 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.

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 $1.6 million and $3.8 million for the years ended June 30, 2019 and 2018, respectively.

Materials and Supplies Inventory The materials and supplies inventory balance at June 30, 2019 and 2018 was $18.0 million and $10.6 million, respectively, and consists of laboratory materials and supplies. The Institute uses the moving average cost basis to account for its materials and supplies inventory. Inventories are valued at the lower of cost or net realizable value.

Deposits With Trustee Deposits with trustee consist principally of investments in money market accounts and have been deposited with a trustee as required under bond and other agreements. The amount includes restricted cash under an escrow agreement of $646 thousand and $633 thousand at June 30, 2019 and 2018, respectively.

7 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

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 $45.0 million and $52.0 million in pledges for the years ended June 30, 2019 and 2018, respectively, of which $25.0 million and $24.0 million remained outstanding as of June 30, 2019 and 2018, 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 the 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, 2019 and 2018, the deferred charges in prepaid expenses and other assets, net were $12.4 million and $9.2 million, respectively. Deferred charges included in accrued expenses and other liabilities were $17.0 million and $35.4 million at June 30, 2019 and 2018, respectively.

8 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

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 $993 thousand and $1.0 million at June 30, 2019 and 2018, 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, loss on refunding of debt, and changes in beneficial interest in trust.

Grants and Contracts Revenue The Institute recognizes revenue from external organizations for services provided under exchange and non-exchange grants and contracts. The majority of research grant revenue pertains to non- exchange 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 non-exchange 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 non-exchange grants and contracts as these conditions are satisfied. At June 30, 2019, the Institute held $213.6 million of conditional grants and contracts not recognized as revenue in the statements of activities.

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. Grants and contracts, for which the contractual performance obligations have not yet been made or the right to recognize revenue is dependent on future events, totaled $197.1 million at June 30, 2019.

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, 2019. 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 50% and 53% of its grants and contracts revenues from governmental agencies for the years ended June 30, 2019 and 2018, respectively. The Institute received 95% of this revenue from the National Institutes of Health, for the years ended June 30, 2019 and 2018.

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, 2019 and 2018

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, potentially deriving benefit from that use. 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 year ended June 30, 2019, no revenue related to potential milestone achievements was recorded and there were no material contractual performance obligations that had not been met.

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 3% each year of discretionary contribution on eligible compensation to eligible employees. Employer contributions to the plan for the years ended June 30, 2019 and 2018 totaled $11.8 million and $10.3 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 employee transportation benefits, 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 2018, the Institute early adopted a provision of 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. Impairment of such investments must be assessed qualitatively at each reporting period. Entities must disclose their financial assets and liabilities by measurement category and form of asset either on the face of the statement of financial position or in the accompanying notes. The ASU is effective for annual reporting periods beginning after December 15, 2018 or fiscal year 2020 for the Institute. The Institute is evaluating the impact that the remaining portions of the pronouncement will have on the consolidated financial statements upon adoption in fiscal year 2020.

10 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

In fiscal year 2019, the Institute adopted ASU 2014-09, Revenue from Contracts with Customers, which outlines a single comprehensive revenue model for entities to use in accounting for revenue arising from contracts with customers. The guidance supersedes most current revenue recognition guidance, including industry-specific guidance, and ensures that entities appropriately reflect the consideration to which they expect to be entitled in exchange for goods and services, by allocating transaction price to identified performance obligations, and recognizing that revenue as performance obligations are satisfied. The Institute applied the standard using the modified retrospective transition method. This guidance did not have a material impact on the Institute's financial statements and related disclosures.

The Institute also adopted ASU 2018-08, Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made (Topic 958) in fiscal year 2019. The FASB issued this update to clarify and improve the scope and accounting guidance for contributions received and made. The amendments of this update should assist entities in (1) evaluating whether transactions should be accounted for as contributions (nonreciprocal transactions) within the scope of Topic 958, Not-for-Profit Entities, or as exchange transactions subject to other guidance and (2) determining whether a contribution is conditional. The Institute applied the standard using a modified prospective approach as of July 1, 2018, which resulted in the recognition of an additional $34.2 million of grants and contracts revenue on the statements of activities for the year ended June 30, 2019. In addition, the Institute added new revenue disclosures, as applicable.

In fiscal year 2019, the Institute adopted new guidance regarding ASU 2016-14, Presentation of Financial Statements for Not-for-Profit Entities. This guidance is intended to improve the net asset classification requirements and the information presented in the financial statements and notes about a not-for-profit entity’s liquidity and availability of financial assets, financial performance, and cash flows. Main provisions of this guidance include presentation of two classes of net assets versus the previously required three, and recognition of underwater endowment funds as a reduction in net assets with donor restrictions. The guidance also enhances disclosures for board- designated amounts, composition of net assets without donor restrictions, liquidity, and expenses by both their natural and functional classifications, and eliminates the requirement to disclose the composition of investment return (investment income, net realized gains or losses on investments reported at other than fair value, and net gains or losses on investments reported at fair value). These changes are reflected in the Institute’s financial statements and footnotes and have been applied retrospectively, where applicable.

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 2020.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. It is intended to reduce diversity in the presentation of restricted cash and cash equivalents in the statement. The statement requires that restricted cash and cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. The Institute is evaluating the impact this standard will have on the consolidated financial statements upon adoption in fiscal year 2020.

11 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

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, 2019 ranges from 1.71% to 1.75%. Pledges receivable are classified as Level 3 under the valuation hierarchy described in Note 6. 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, 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. At December 31, 2017, the Foundation’s annual rate of return was 13.6%, increasing the Institute’s pledge receivable due from the Foundation by $28.6 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, 2019 and 2018 are expected to be realized as follows:

(in thousands) 2019 2018

Less than one year$ 104,402 $ 112,285 One to five years 82,876 133,906 Pledges receivable 187,278 246,191 Less: Present value discount (296) (23) Pledges receivable, net$ 186,982 $ 246,168

12 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

A rollforward of pledges receivable at June 30, 2019 and 2018 is as follows (in thousands):

Pledges receivable, net at June 30, 2017 $ 299,818 New pledges 80,063 Pledge payments received (134,520) Pledge discount 807 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

At June 30, 2019 and 2018, the Institute held $2.0 million and $4.0 million, respectively, of conditional pledges not recognized as assets in the statements of financial position.

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 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

13 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

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

Changes in endowment net assets for the year ended June 30, 2019 consisted of the following:

2019 Without Donor With Donor (in thousands) Restrictions Restrictions Total

Endowment net assets at beginning of year $ - $ 644,424 $ 644,424 Contributions and pledges - 12,820 12,820 Investment return - 16,395 16,395 Endowment returns made available for operations - (28,839) (28,839) Endowment net assets at end of year $ - $ 644,800 $ 644,800

Changes in endowment net assets for the year ended June 30, 2018 consisted of the following:

2018 Without Donor With Donor (in thousands) Restrictions Restrictions Total

Endowment net assets at beginning of year $ - $ 609,291 $ 609,291 Contributions and pledges - 33,062 33,062 Investment return - 30,417 30,417 Endowment returns made available for operations - (28,346) (28,346) Endowment net assets at end of year $ - $ 644,424 $ 644,424

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 spending rate applied to the endowment value two years prior was 4.7%, yielding a distribution of $28.8 million and $28.3 million for the years ending June 30, 2019 and 2018, 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, 2019 or 2018.

5. Investments

The fair value of investments were $555.1 million and $514.8 million at June 30, 2019 and 2018, respectively. The Institute held $32.6 million and $21.4 million of investments on behalf of its beneficial interest in trust as of June 30, 2019 and 2018, respectively. An offsetting amount is recorded for the same amount in accrued expenses and other liabilities.

14 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

6. Fair Value Measurements

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 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, 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) (Level 1) (Level 2) (Level 3) 2019

Deposits with trustee$ 646 $ - $ - $ 646 Pledges receivable, net - - 186,982 186,982 Beneficial interest in trust - - 26,526 26,526 Total assets at fair value$ 646 $ - $ 213,508 $ 214,154

15 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

The table below represents the Institute’s financial instruments at fair value at June 30, 2018, grouped by the valuation hierarchy as defined above:

2018 Quoted Prices Significant in Active Other Significant Fair Markets for Observable Unobservable Value at Identical Assets Inputs Inputs June 30, (in thousands) (Level 1) (Level 2) (Level 3) 2018

Common stock$ 10,232 $ - $ - $ 10,232 Deposits with trustee 772 - - 772 Pledges receivable, net - - 246,168 246,168 Beneficial interest in trust - - 12,381 12,381 Total assets at fair value$ 11,004 $ - $ 258,549 $ 269,553

Investments include units in the CareGroup Investment Partnership, LLP and the Global Endowment Fund II, LP (the “Funds”). 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 $517.6 million and $504.6 million at June 30, 2019 and 2018, respectively. At June 30, 2019, Sequoia Heritage (SCHF USTE, L.P.) held cash pertaining to a funded commitment in the amount of $37.5 million. There were no unfunded commitments as of June 30, 2019 and 2018.

The Funds’ liquidity policy sets the parameters for any participant seeking to liquidate funds as follows: CareGroup Investment Partnership, LLP for up to 6% of total investments, 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 by a participant of the Fund 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. 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.

16 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

Investment allocation at June 30, 2019 and 2018 was as follows:

2019 2018

Hedged equity/credit 28 % 30 % Equity 38 42 Cash and cash equivalents 10 11 Real estate/real assets 10 12 Fixed income 14 5 100 % 100 %

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

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, 2019 and 2018:

(in thousands)

Beneficial interest in trust at June 30, 2017 $ 12,998 Change in value 51,383 Pledges (52,000) 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

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.

17 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

7. Property, Plant and Equipment

The major categories of property, plant and equipment at June 30, 2019 and 2018 are summarized as follows:

(in thousands) 2019 2018

Land$ 25,000 $ 25,000 Building and building improvements 301,044 300,674 Equipment 174,681 167,212 Leasehold improvements 49,931 46,219 Building under capital lease 101,720 101,720 Assets under construction 1,564 248 Total property, plant and equipment, gross 653,940 641,073 Accumulated depreciation (235,243) (210,095) Total property, plant and equipment, net$ 418,697 $ 430,978

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 $538 thousand and $4.9 million, respectively, for the year ended June 30, 2019 and $512 thousand and $5.0 million, respectively, for the year ended June 30, 2018. Accumulated depreciation related to the capital lease was $7.0 million and $4.9 million at June 30, 2019 and 2018, respectively.

8. 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. As a result of this transaction, the Institute recorded a loss on the refunding of debt of $26.0M in fiscal year 2018.

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, 2019 and 2018 was $2.8 million and $1.7 million, respectively. OID amortization expense for the years ended June 30, 2019 and 2018 was $70 thousand and $43 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.

18 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

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 improvements, certain equipment and to repay a July 2010 loan used to finance leasehold improvements.

The Series B Bonds mature in full on April 1, 2020. Interest is payable semiannually, each April 1 and October 1, at an annual rate ranging from 1.15% to 4.87%. The OID of $282 thousand is being amortized over the life of the Series B Bonds using the effective interest rate method. OID amortization income for the years ended June 30, 2019 and 2018 was $54 thousand and $60 thousand, respectively, and capitalized as part of the cost of the building.

The Series B Bonds are subject to optional redemption prior to maturity at the direction of the Institute at 100% of their principal amount, plus accrued interest to the redemption date.

The following schedule summarizes principal installments due in the next five years and thereafter:

2017 Series 2011 Series B (in thousands) Bonds Bonds Total

2020$ - $ 12,500 $ 12,500 2021 12,630 - 12,630 2022 12,530 - 12,530 2023 12,475 - 12,475 2024 12,330 - 12,330 Thereafter 200,270 - 200,270 Unamortized premium 36,440 - 36,440 Unamortized discount (920) 29 (891) Unamortized issuance costs (1,023) 30 (993) Debt, net$ 284,732 $ 12,559 $ 297,291

9. 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.

19 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

Operating and nonoperating expenses by functional and natural classification as of June 30, 2019 and 2018 were as follows:

2019 Management (in thousands) 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

2018 Management (in thousands) Research and general Total

Salaries and wages$ 111,102 $ 29,135 $ 140,237 Employee benefits 30,854 5,075 35,929 Materials and services 125,101 27,937 153,038 Rent, utilities, and maintenance 26,332 3,884 30,216 Grants and other assistance 49,259 - 49,259 Depreciation 34,822 3,058 37,880 Interest 14,429 2,720 17,149 Other 2,051 1,450 3,501 Total expenses$ 393,950 $ 73,259 $ 467,209

10. 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.

20 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

The following summarizes the financial assets available to meet its general expenditures within one year of the balance sheet date, as of June 30, 2019:

(in thousands of dollars) June 30, 2019

Financial assets Cash and cash equivalents$ 249,540 Agency cash 6,429 Accounts receivable, net 85,930 Pledges receivable, net 186,982 Investments 555,138 Total financial assets, at year-end 1,084,019 Less those unavailable for general expenditures within 12 months of the balance sheet date Cash and cash equivalents with restrictions (52,163) Agency cash (6,429) Accounts receivable, collectible beyond one year (4,063) Pledges receivable, restricted by purpose or collectible beyond one year (186,982) Investments restricted by purpose or time beyond one year (506,403) Financial assets available to meet cash needs for general expenditures within 12 months of the balance sheet date$ 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.

11. Commitments and Contingencies

The Institute is the lessee of space under both operating and capital leases. Rent expense relating to leases was $9.8 million and $6.7 million for the years ended June 30, 2019 and 2018, respectively. Future minimum payments under these operating and capital leases are as follows:

(in thousands) Operating Capital

2020$ 9,132 $ 5,482 2021 9,262 5,482 2022 9,335 5,482 2023 8,017 5,482 2024 7,790 5,482 Thereafter 17,143 227,951 Total lease payments due$ 60,679 $ 255,361

The portion of the future minimum payments under capital leases that represents interest is $155.5 million.

21 The Broad Institute, Inc. Notes to the Consolidated Financial Statements June 30, 2019 and 2018

The Institute has made certain purchase commitments not reflected in the statements of financial position at June 30, 2019 and 2018, in the amount of $24.4 million and $44.6 million, respectively, mainly related to purchases of property management services, computing storage, software, scientific lab supplies and utilities not yet received.

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.

12. Subsequent Events

The Institute has assessed the impact of subsequent events through October 30, 2019, the date the audited financial statements were issued.

22

Schedule of Expenditures of Federal Awards

The Broad Institute, Inc. Schedule of Expenditures of Federal Awards June 30, 2019

Award/Pass-through CFDA Total Passed Entity Identification Number Federal Through to Federal Grantor/Pass-through Grantor/Program or Cluster Title Number Expenditures Subrecipients Research and Development Cluster Department of Health and Human Services National Institutes of Health (NIH) Direct

Human Genome Research U54HG006991 93.172$ (11,866) $ (11,866) Human Genome Research R01HG008131 93.172 77,958 - Human Genome Research UM1HG008895 93.172 19,685,649 66,639 Human Genome Research UM1HG008900 93.172 3,457,698 129,227 Human Genome Research RM1HG006193 93.172 1,962,811 167,615 Human Genome Research R25HG006682 93.172 385,162 - Human Genome Research R01HG008742 93.172 573,924 74,219 Human Genome Research R01HG009276 93.172 1,306,010 - Human Genome Research UM1HG009390 93.172 2,458,753 419,831 Human Genome Research R01HG009761 93.172 1,439,391 - Human Genome Research R21HG009749 93.172 201,972 - Human Genome Research U41HG009494 93.172 1,718,074 - Human Genome Research R01HG009283 93.172 1,032,746 180,557 Human Genome Research UM1HG009435 93.172 1,313,183 487,469 Human Genome Research R01HG009141 93.172 848,924 259,135 Human Genome Research K99HG009917 93.172 62,181 - Human Genome Research R01HG010040 93.172 129,689 - Human Genome Research K99HG009920 93.172 92,729 - Human Genome Research U24HG010262 93.172 1,987,584 - Subtotal - Human Genome Research 38,722,572 1,772,826 Mental Health Research Grants U01MH105641 93.242 2,231,571 - Mental Health Research Grants U01MH105669 93.242 851,512 - Mental Health Research Grants R01MH107649 93.242 856,362 93,054 Mental Health Research Grants R01MH110049 93.242 484,371 - Mental Health Research Grants R21MH109761 93.242 126,375 - Mental Health Research Grants U01MH111660 93.242 625,943 - Mental Health Research Grants R01MH111529 93.242 1,172,458 56,992 Mental Health Research Grants R01MH111813 93.242 462,548 112,625 Mental Health Research Grants U01MH115727 93.242 4,736,036 2,612,659 Mental Health Research Grants R01MH115045 93.242 634,168 - Mental Health Research Grants F32MH115630 93.242 14,775 - Mental Health Research Grants R56MH115957 93.242 432,835 - Subtotal - Mental Health Research Grants 12,628,954 2,875,330 Discovery and Applied Research for Technological Innovations to Improve Human Health R01EB022376 93.286 465,818 - Subtotal - Discovery and Applied Research for Technological Innovations to Improve Human Health 465,818 - Trans-NIH Research Support U54DE023798 93.310 (8,125) (8,125) Trans-NIH Research Support U54HG008097 93.310 1,625,168 544,726 Trans-NIH Research Support U01HG008699 93.310 880,789 - Trans-NIH Research Support R01DK097768 93.310 (5,340) - Trans-NIH Research Support R01DK113597 93.310 528,756 234,632 Trans-NIH Research Support U24DK112340 93.310 620,492 91,108 Trans-NIH Research Support DP5OD024582 93.310 267,477 - Trans-NIH Research Support DP5OD024583 93.310 528,256 - Trans-NIH Research Support DP5OD024590 93.310 496,594 - Trans-NIH Research Support U01AI142756 93.310 434,855 - Trans-NIH Research Support UG3NS111689 93.310 693,033 - Subtotal - Trans-NIH Research Support 6,061,955 862,341 National Center for Advancing Translational Sciences OT2TR002584 93.350 771,740 - Subtotal - National Center for Advancing Translational Sciences 771,740 - Research Infrastructure Programs R24OD018250 93.351 139,751 - Subtotal - Research Infrastructure Programs 139,751 - Cancer Cause and Prevention Research R01CA208756 93.393 462,551 - Cancer Cause and Prevention Research U01CA217848 93.393 1,180,167 - Subtotal - Cancer Cause and Prevention Research 1,642,718 - Cancer Detection and Diagnosis Research R33CA202820 93.394 195,082 21,850 Cancer Detection and Diagnosis Research U24CA210986 93.394 1,569,144 - Cancer Detection and Diagnosis Research U24CA210979 93.394 974,216 - Cancer Detection and Diagnosis Research U24CA210978 93.394 479,752 - Cancer Detection and Diagnosis Research U24CA210999 93.394 630,450 - Subtotal - Cancer Detection and Diagnosis Research 3,848,644 21,850 Cancer Treatment Research R01CA219943 93.395 534,454 79,610 Subtotal - Cancer Treatment Research 534,454 79,610 Cancer Biology Research R01CA190101 93.396 176,070 38,235 Cancer Biology Research U01CA199253 93.396 1,160,424 42,879 Cancer Biology Research R50CA211461 93.396 355,890 - Cancer Biology Research U24CA180922 93.396 782,948 145,181 Subtotal - Cancer Biology Research 2,475,332 226,295

The accompanying note is an integral part of this schedule. 23 The Broad Institute, Inc. Schedule of Expenditures of Federal Awards June 30, 2019

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

Cardiovascular Diseases Research U54HL127366 93.837 2,391,833 - Cardiovascular Diseases Research R01HL131015 93.837 1,660,360 225,362 Cardiovascular Diseases Research DP1HL141201 93.837 1,514,967 - Subtotal - Cardiovascular Diseases Research 5,567,160 225,362 Blood Diseases and Resources Research DP2HL141005 93.839 723,688 - Subtotal - Blood Diseases and Resources Research 723,688 - Diabetes, Digestive, and Kidney Diseases Extramural Research R01DK092405 93.847 213,399 9,963 Diabetes, Digestive, and Kidney Diseases Extramural Research U54DK105566 93.847 1,213,226 182,073 Diabetes, Digestive, and Kidney Diseases Extramural Research U01DK105554 93.847 3,216,745 1,436,999 Diabetes, Digestive, and Kidney Diseases Extramural Research R01DK105154 93.847 362,134 238,227 Diabetes, Digestive, and Kidney Diseases Extramural Research K99DK113224 93.847 17,359 - Diabetes, Digestive, and Kidney Diseases Extramural Research RC2DK114784 93.847 1,964,695 303,331 Diabetes, Digestive, and Kidney Diseases Extramural Research UC4DK116255 93.847 557,812 237,582 Diabetes, Digestive, and Kidney Diseases Extramural Research R24DK110499 93.847 1,685,193 1,308,789 Diabetes, Digestive, and Kidney Diseases Extramural Research DP1DK119139 93.847 388,067 - Subtotal - Diabetes, Digestive, and Kidney Diseases Extramural Research 9,618,630 3,716,964 Extramural Research Programs in the Neurosciences and Neurological Disorders R24NS092983 93.853 168,145 - Extramural Research Programs in the Neurosciences and Neurological Disorders R01NS100802 93.853 472,669 - Extramural Research Programs in the Neurosciences and Neurological Disorders R21NS110355 93.853 21,143 - Subtotal - Extramural Research Programs in the Neurosciences and Neurological Disorders 661,957 - Allergy and Infectious Diseases Research U19AI110818 93.855 5,899,354 77,600 Allergy and Infectious Diseases Research R01AI114855 93.855 589,1516,177 Allergy and Infectious Diseases Research R01AI117043 93.855 1,197,001 154,435 Allergy and Infectious Diseases Research U24AI118668 93.855 501,017- Allergy and Infectious Diseases Research U24AI118672 93.855 363,904- Allergy and Infectious Diseases Research R21AI121932 93.855 (86,896) - Allergy and Infectious Diseases Research F32AI129249 93.855 55,540 - Allergy and Infectious Diseases Research R01AI132300 93.855 1,293,132 536,829 Allergy and Infectious Diseases Research F32AI138458 93.855 51,273 - Allergy and Infectious Diseases Research R21AI141080 93.855 11,284 - Subtotal - Allergy and Infectious Diseases Research 9,874,760 775,041 Biomedical Research and Research Training R01GM038627 93.859 55,617- Biomedical Research and Research Training R35GM122547 93.859 845,171 - Biomedical Research and Research Training R35GM122455 93.859 697,726 41,361 Biomedical Research and Research Training F32GM122261 93.859 52,334- Biomedical Research and Research Training R35GM118062 93.859 697,669 - Biomedical Research and Research Training R35GM127045 93.859 462,276 - Biomedical Research and Research Training F32GM133088 93.859 4,167 - Subtotal - Biomedical Research and Research Training 2,814,960 41,361 Child Health and Human Development Extramural Research U24HD090743 93.865 3,358,558 - Child Health and Human Development Extramural Research K99HD096049 93.865 118,338 - Subtotal - Child Health and Human Development Extramural Research 3,476,896 - Aging Research U01AG046152 93.866 (11) (11) Aging Research DP2AG058488 93.866 520,200 - Subtotal - Aging Research 520,189 (11) Vision Research K99EY028625 93.867 104,929 - Subtotal - Vision Research 104,929 - 21st Century Cures Act - Precision Medicine Initiative OT2OD002750 93.368 739,029 277,066 Subtotal - 21st Century Cures Act - Precision Medicine Initiative 739,029 277,066 Cancer Research Manpower F32CA232543 93.398 47,089 - Cancer Research Manpower K00CA212229 93.398 59,619 - Cancer Research Manpower F32CA236425 93.398 26,106 - Subtotal - Cancer Research Manpower 132,814 - NIH National Heart, Lung, and Blood Institute HHSN268201000029C 93.RD (2,881) - NIH National Heart, Lung, and Blood Institute HHSN268201600034I 93.RD 12,169,077 709,029 Subtotal - NIH National Heart, Lung, and Blood Institute Contracts 12,166,196 709,029 Subtotal - National Institutes of Health - Direct 113,693,146 11,583,064

The accompanying note is an integral part of this schedule. 24 The Broad Institute, Inc. Schedule of Expenditures of Federal Awards June 30, 2019

Award/Pass-through CFDA Total Passed Entity Identification Number Federal Through to Federal Grantor/Pass-through Grantor/Program or Cluster Title Number Expenditures Subrecipients Research and Development Cluster Department of Health and Human Services National Institutes of Health (NIH) Pa ss-through

Environmental Health - Harvard School of Public Health 117195-5105248 93.113 4,575 - Subtotal - Enviromental Health 4,575 - Oral Diseases and Disorders Research - The Ohio State University 60049687 93.121 (136) - Subtotal - Oral Diseases and Disorders Research (136) - Human Genome Research - Baylor College of Medicine 7000000566 93.172 207,992 - Human Genome Research - Brigham & Women's Hospital, Inc. 113059 93.172 197,547 - Human Genome Research - Brigham & Women's Hospital, Inc. 119937 93.172 1,386,167 - Human Genome Research - Harvard School of Public Health 117103-5098768 93.172 10,980 - Human Genome Research - Harvard School of Public Health 117112-5098553 93.172 11,955 - Human Genome Research - Redeemer's University U54HG007480 93.172 174,041 - Human Genome Research - Scribe Biosciences, Inc. SCB BRD 01 93.172 42,748 - Human Genome Research - University of California, Berkeley 00009717 93.172 366,359 - Human Genome Research - University of California, San Diego 69738003(MP invoice # S9001289) 93.172 276,599 - Human Genome Research - University of California, Santa Cruz A00-2190-S007-P0562530 93.172 13,905 - Human Genome Research - University of California, Santa Cruz A18-0045-S001-P0658453 93.172 235,965 - Human Genome Research - University of Louisville Research Foundation ULRF 17-0906-03 93.172 1,367 - Subtotal - Human Genome Research 2,925,625 - Mental Health Research Grants - Allen Institute 2017-0565 93.242 516,516 - Mental Health Research Grants - Cold Spring Harbor Laboratory 64580222/84580226/64580228 93.242 7,361,910 - Mental Health Research Grants - Harvard Medical School 153212.5111092.0202 93.242 172,799 - Mental Health Research Grants - Harvard University 138071-5081626 93.242 14,594 - Mental Health Research Grants - Harvard University 138071-5097509 93.242 (44,053) - Mental Health Research Grants - Harvard University 132665-5098421 93.242 276,848 - Mental Health Research Grants - Harvard University 164641-5105238 93.242 281,621 - Mental Health Research Grants - Massachusetts General Hospital 224901 93.242 (2,871) - Mental Health Research Grants - Massachusetts General Hospital 228485 93.242 35,134 - Mental Health Research Grants - Massachusetts Institute of Technology 53993 93.242 52,344 - Mental Health Research Grants - University of California, Los Angeles 2000 G TB276 93.242 1,184,415 - Mental Health Research Grants - University of California, San Diego 78646937 93.242 480,779 - Mental Health Research Grants - University of North Carolina 5100716 93.242 23,448 - Subtotal - Mental Health Research Grants 10,353,484 - Trans-NIH Research Support - Massachusetts Eye and Ear Infirmary 2300199 93.310 95,748 - Trans-NIH Research Support - New York Genome Center OT2-BROAD-1 93.310 86,829 - Trans-NIH Research Support - The Jackson Laboratory 210235-0719-02 93.310 (44,173) - Trans-NIH Research Support - University of California, Santa Cruz A18-0679-S002-P0654877 93.310 866,350 - Trans-NIH Research Support - Vanderbilt University VUMC59306 93.310 4,016,740 - Trans-NIH Research Support - Vanderbilt University VUMC70571 93.310 661,684 - Subtotal - Trans-NIH Research Support 5,683,178 - 21st Century Cures Act - Beau Biden Cancer Moonshot - Dana Farber Cancer Institute 1195707 93.353 261,157 - 21st Century Cures Act - Beau Biden Cancer Moonshot - - Dana Farber Cancer Institute 1250102 93.353 571,769 - 21st Century Cures Act - Beau Biden Cancer Moonshot - Dana Farber Cancer Institute 1206201 93.353 99,959 - 21st Century Cures Act - Beau Biden Cancer Moonshot - Dana Farber Cancer Institute 1206301 93.353 86,966 - 21st Century Cures Act - Beau Biden Cancer Moonshot - Boston University 4500002988 93.353 117 - 21st Century Cures Act - Beau Biden Cancer Moonshot - - Massachusetts General Hospital 231617 93.353 229,415 - Subtotal - 21st Century Cures Act - Beau Biden Cancer Moonshot 1,249,383 - Biomedical Advanced Research and Development Authority, Biodefense Medical Countermeasure Development - Boston University 4500002209 93.360 476,398 309,710 Subtotal - Biomedical Advanced Research and Development Authority, Biodefense Medical Countermeasure Development 476,398 309,710 Cancer Cause and Prevention Research - Brigham & Women's Hospital, Inc. 112786 93.393 394,570 - Cancer Cause and Prevention Research - Harvard School of Public Health 111170-5081528 93.393 (53,414) - Cancer Cause and Prevention Research - Dana Farber Cancer Institute 1299903 93.393 24,690 - Cancer Cause and Prevention Research - Dana Farber Cancer Institute 1248001 93.393 149,161 - Cancer Cause and Prevention Research - Dana Farber Cancer Institute 1217706 93.393 239,732 - Subtotal - Cancer Cause and Prevention Research 754,739 - Cancer Detection and Diagnostic Research - - Dana Farber Cancer Institute 1196208 93.394 (13,662) - Cancer Detection and Diagnostic Research - Dana Farber Cancer Institute 1168602 93.394 59,043 - Cancer Detection and Diagnostic Research - Massachusetts General Hospital 227914 93.394 212,782 - Cancer Detection and Diagnostic Research - Baylor College of Medicine 7000000403 93.394 880,445 - Cancer Detection and Diagnostic Research - Baylor College of Medicine 7000000617 93.394 429,061 - Subtotal - Cancer Detection and Diagnostic Research 1,567,669 -

The accompanying note is an integral part of this schedule. 25 The Broad Institute, Inc. Schedule of Expenditures of Federal Awards June 30, 2019

Award/Pass-through CFDA Total Passed Entity Identification Number Federal Through to Federal Grantor/Pass-through Grantor/Program or Cluster Title Number Expenditures Subrecipients Cancer Treatment Research - Dana Farber Cancer Institute 1284603 93.395 205,482 - Cancer Treatment Research - Massachusetts General Hospital 227448 93.395 12,939 - Cancer Treatment Research - University of Massachusetts Boston OSP2018092 93.395 441,367 - Subtotal - Cancer Treatment Research 659,788 - Cancer Biology Research - Dana Farber Cancer Institute 1225705 93.396 60,575 - Cancer Biology Research - Dana Farber Cancer Institute 1212309 93.396 275,103 - Cancer Biology Research - University of California, San Diego 82780303 93.396 183,617 - Cancer Biology Research - University of California, San Diego 103441795 93.396 149,958 - Subtotal - Cancer Biology Research 669,253 - Cancer Centers Support Grants - Dana Farber Cancer Institute 1220510 93.397 21,703 - Cancer Centers Support Grants - Beth Israel Hospital 01060256 93.397 12,466 - Subtotal - Cancer Centers Support Grants 34,169 - Cardiovascular Diseases Research - Washington University WU-17-319-MOD-2 93.837 19,878 - Cardiovascular Diseases Research - - University of California, Santa Cruz A18-0757-S001-P0654931 93.837 1,996,174 - Cardiovascular Diseases Research - Harvard School of Public Health 111260-5104996 93.837 5,308 - Cardiovascular Diseases Research - Harvard School of Public Health 111246-5103429 93.837 180,934 - Cardiovascular Diseases Research - Mount Sinai School of Medicine 0255-7892-4609 93.837 150,000 - Cardiovascular Diseases Research - - University of Mississippi Medical Center 66108920219-BR 93.837 9,713 - Cardiovascular Diseases Research - - Brigham & Women's Hospital, Inc. 113892 93.837 416,262 - Cardiovascular Diseases Research - Massachusetts General Hospital 227547 93.837 268,470 - Cardiovascular Diseases Research - Massachusetts General Hospital 226405 93.837 159,364 - Cardiovascular Diseases Research - Massachusetts General Hospital 230189 93.837 273,588 - Cardiovascular Diseases Research - Beth Israel Hospital 01061467 93.837 50,591 - Cardiovascular Diseases Research - University of Illinois 16791-01 93.837 118,315 - Subtotal - Cardiovascular Diseases Research 3,648,597 - Lung Diseases Research - Brigham & Women's Hospital, Inc. 111050 93.838 (16,659) - Subtotal - Lung Diseases Research (16,659) - Blood Diseases and Resources Research - Dana Farber Cancer Institute 1169213 93.839 39,558 - Blood Diseases and Resources Research - Feinstein Institute for Medical Research 500798BI 93.839 16,260 - Subtotal - Blood Diseases and Resources Research 55,818 - Arthritis, Musculoskeletal and Skin Diseases Research - Feinstein Institute for Medical Research 500678BI 93.846 558,395 - Arthritis, Musculoskeletal and Skin Diseases Research - Brigham & Women's Hospital, Inc. 111166 93.846 256,308 - Arthritis, Musculoskeletal and Skin Diseases Research - Brigham & Women's Hospital, Inc. 111565 93.846 72,395 - Arthritis, Musculoskeletal and Skin Diseases Research - Brigham & Women's Hospital, Inc. 115457 93.846 2,390 - Arthritis, Musculoskeletal and Skin Diseases Research - Brigham & Women's Hospital, Inc. 115455 93.846 10,241 - Subtotal - Arthritis, Musculoskeletal and Skin Diseases Research 899,729 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Massachusetts General Hospital 226082 93.847 43,636 39,285 Diabetes, Digestive, and Kidney Diseases Extramural Research - Children's Hospital Boston GENFD0001516210 93.847 349,361 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Massachusetts General Hospital 227036 93.847 9,858 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Harvard University 164623-5098793 93.847 22,235 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Harvard University 153277.5107749.0003 93.847 129,671 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Harvard School of Public Health 111158-5076883 93.847 3,504 -

The accompanying note is an integral part of this schedule. 26 The Broad Institute, Inc. Schedule of Expenditures of Federal Awards June 30, 2019

Award/Pass-through CFDA Total Passed Entity Identification Number Federal Through to Federal Grantor/Pass-through Grantor/Program or Cluster Title Number Expenditures Subrecipients Diabetes, Digestive, and Kidney Diseases Extramural Research - Massachusetts General Hospital 233311 93.847 20,675 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Montreal Heart Institute 64869-1517-B 93.847 (1,379) - Diabetes, Digestive, and Kidney Diseases Extramural Research - Beth Israel Hospital 01029357 93.847 84,110 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Beth Israel Hospital 01060496 93.847 341,567 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Northwestern University 60037997 BIMH 93.847 104,400 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Massachusetts General Hospital 228238 93.847 49,354 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Tulane University TUL-HSC-554002-16/17 93.847 (11,607) - Diabetes, Digestive, and Kidney Diseases Extramural Research - University of Michigan 3005195138 93.847 207,195 - Diabetes, Digestive, and Kidney Diseases Extramural Research - Massachusetts General Hospital 231096 93.847 41,537 - Diabetes, Digestive, and Kidney Diseases Extramural Research - University of South Florida 6163-1042-01-BH 93.847 327,810 - Diabetes, Digestive, and Kidney Diseases Extramural Research - University of South Florida 6163-1042-00-BD 93.847 11,200 - Diabetes, Digestive, and Kidney Diseases Extramural Research - University of South Florida 6163-1017-00-AX 93.847 (816) - Diabetes, Digestive, and Kidney Diseases Extramural Research - University of South Florida 6163-1007-00-BD 93.847 113,245 - Subtotal - Diabetes, Digestive, and Kidney Diseases Extramural Research 1,845,556 39,285 Extramural Research Programs in the Neurosciences and Neurological Disorders - Harvard School of Public Health 111186-5090004 93.853 154,022 - Extramural Research Programs in the Neurosciences and Neurological Disorders - Northwestern University 60051734 BI 93.853 66,553 - Extramural Research Programs in the Neurosciences and Neurological Disorders - Northwestern University 60051733 BI 93.853 98,714 - Extramural Research Programs in the Neurosciences and Neurological Disorders - Massachusetts General Hospital 226541 93.853 47,955 - Subtotal - Extramural Research Programs in the Neurosciences and Neurological Disorders 367,244 - Allergy and Infectious Diseases Research - Washington University WU-18-340 93.855 304,027 - Allergy and Infectious Diseases Research - University of California - San Francisco 9436sc 93.855 107,851 - Allergy and Infectious Diseases Research - Harvard University 152414.5103475.0202 93.855 136,141 - Allergy and Infectious Diseases Research - Harvard School of Public Health 109724-5092640 93.855 130,478 - Allergy and Infectious Diseases Research - Yale University GK000516 (CON-8000057) 93.855 199,274 - Allergy and Infectious Diseases Research - The Washington University WU-18-343 93.855 570,070 - Allergy and Infectious Diseases Research - The Washington University WU-16-281-MOD-2 93.855 15,378 - Allergy and Infectious Diseases Research - The Washington University WU-19-259 93.855 1,490 - Allergy and Infectious Diseases Research - Massachusetts General Hospital 224614 93.855 171,221 - Allergy and Infectious Diseases Research - Massachusetts General Hospital 226414 93.855 25,650 - Allergy and Infectious Diseases Research - Massachusetts General Hospital 228795 93.855 15,087 - Allergy and Infectious Diseases Research - Brigham & Women's Hospital, Inc. 112673 93.855 142,556 - Allergy and Infectious Diseases Research - Brigham & Women's Hospital, Inc. 116146 93.855 77,948 - Allergy and Infectious Diseases Research - Dana Farber Cancer Institute 1006819 93.855 16,747 - Allergy and Infectious Diseases Research - Harvard University 152416.5102753.0019 93.855 499,203 - Allergy and Infectious Diseases Research - Harvard University 152414.5103477.0204 93.855 285,765 - Allergy and Infectious Diseases Research - Harvard University 152414.5103479.0203 93.855 621,113 - Allergy and Infectious Diseases Research - Mount Sinai School of Medicine 0255-B131-4609 93.855 256,214 - Allergy and Infectious Diseases Research - Tufts University 102222-00001/NIH010 93.855 49,371 -

The accompanying note is an integral part of this schedule. 27 The Broad Institute, Inc. Schedule of Expenditures of Federal Awards June 30, 2019

Award/Pass-through CFDA Total Passed Entity Identification Number Federal Through to Federal Grantor/Pass-through Grantor/Program or Cluster Title Number Expenditures Subrecipients Allergy and Infectious Diseases Research - Benaroya Research Institute at Virginia Mason FY18ITN303 93.855 8,388 - Allergy and Infectious Diseases Research - University of Pittsburgh 9015181 (131616-1) 93.855 246,743 - Allergy and Infectious Diseases Research - The University of Texas Southwestern Medical Center GMO 190409 93.855 43,675 - Allergy and Infectious Diseases Research - Yale University GR105105(CON-80001628) Core B 93.855 175,849 - Allergy and Infectious Diseases Research - Brigham & Women's Hospital, Inc. 111897 93.855 4,985 - Subtotal - Allergy and Infectious Diseases Research 4,105,224 - Biomedical Research and Research Training - Brigham & Women's Hospital, Inc. 113113 93.859 264,687 - Biomedical Research and Research Training - University of California, San Diego 69928063 (MP invoice# S9001293) 93.859 130,730 - Biomedical Research and Research Training - Harvard University 164629-5100328 93.859 759,725 - Biomedical Research and Research Training - Harvard University 153097.5095755.0004 93.859 62,736 - Subtotal - Biomedical Research and Research Training 1,217,878 - Child Health and Human Development External Research - John Hopkins University 2003250208 93.865 142,851 - Child Health and Human Development External Research - Harvard Pilgrim Health Care, Inc. PH000681A 93.865 53,050 - Child Health and Human Development External Research - Massachusetts General Hospital 225991 93.865 462,498 - Subtotal - Child Health and Human Development External Research 658,399 - Aging Research - Columbia University 2(GG012083-01) 93.866 9,478 - Aging Research - Columbia University 4(GG012046) 93.866 386,783 - Aging Research - Columbia University 6(GG012040-01) 93.866 90,198 - Aging Research - Massachusetts General Hospital 232963 93.866 5,304- Aging Research - Massachusetts Institute of Technology 5710004214 93.866 463,016 - Aging Research - Rush University Medical Center 5R01AG017917 93.866 (7,474) - Aging Research - Rush University Medical Center L97092581 93.866 32,161 - Subtotal - Aging Research 979,466 - Vision Research - Children's Hospital of Boston GENFD0001476090 93.867 250,141 - Vision Research - Massachusetts Eye & Ear Infirmary 2300182 93.867 17,568 - Subtotal - Vision Research 267,709 - NIH National Cancer Institute Leidos Biomedical Research, Inc. 15X054 93.RD 13,477,988 - Leidos Biomedical Research, Inc. 16X067 93.RD 33,326 - Leidos Biomedical Research, Inc. 16Q042 93.RD 2,310,192 561,545 Leidos Biomedical Research, Inc. 17X149 93.RD 2,061,623 - Leidos Biomedical Research, Inc. 17X149-Q2 93.RD 3,543,895 1,095,737 Leidos Biomedical Research, Inc. 17X149TO7 93.RD 168,570 - Subtotal - NIH National Cancer Institute Contracts 21,595,594 1,657,282 Total - National Institutes of Health - Pass-through 60,002,680 2,006,277 Subtotal - National Institutes of Health 173,695,826 13,589,341 Research and Development Cluster Department of Health and Human Services Food and Drug Administration Direct Food and Drug Administration HHSF223201810172C 93.RD 318,915 - Subtotal - Food and Drug Administration - Direct 318,915 - Subtotal - Department of Health and Human Services Food and Drug Administration 318,915 - Centers for Disease Control and Prevention Pa ss-through Prevention of Disease, Disability, and Death by Infectious Diseases - Massachusetts General Hospital 231295 93.084 366,051 - Subtotal - Prevention of Disease, Disability, and Death by Infectious Diseases - Pass-through 366,051 - Subtotal - Department of Health and Human Services Centers for Disease Control and Prevention 366,051 - National Aeronautics and Space Administration Direct Science 80NSSC18K1062 43.001 197,676 - Subtotal - Science - Direct 197,676 - Subtotal - National Aeronautics and Space Administration 197,676 -

The accompanying note is an integral part of this schedule. 28 The Broad Institute, Inc. Schedule of Expenditures of Federal Awards June 30, 2019

Award/Pass-through CFDA Total Passed Entity Identification Number Federal Through to Federal Grantor/Pass-through Grantor/Program or Cluster Title Number Expenditures Subrecipients Department of Defense Direct Military Medical Research and Development W81XWH-16-1-0316 12.420 66,915 - Military Medical Research and Development W81XWH-16-1-0719 12.420 513,236 400,292 Military Medical Research and Development W81XWH-18-1-0294 12.420 9,812 - Military Medical Research and Development W81XWH-18-1-0809 12.420 89,259 - Military Medical Research and Development W81XWH1910271 12.420 10,908 - Subtotal - Military Medical Research and Development 690,130 400,292 Research and Technology Development N66001-17-2-4055 12.910 3,466,264 779,924 Research and Technology Development HR0011-17-2-0049 12.910 556,964- Research and Technology Development D18AC00006 12.910 697,491 - Research and Technology Development N660011824502 12.910 639,796 - Subtotal - Research and Technology Development 5,360,515 779,924 Subtotal - Department of Defense - Direct 6,050,645 1,180,216 Department of Defense Pa ss-through Military Medical Research and Development - Henry M. Jackson Foundation 3332 12.420 149,799 - Military Medical Research and Development - Henry M. Jackson Foundation 4631 12.420 138,294 - Subtotal - Military Medical Research and Development 288,093 - Research and Technology Development - Harvard University 153196.5108485.0002 12.910 137,045 - Research and Technology Development - Massachusetts Institute of Technology S4599-001 12.910 1,846,399 - Research and Technology Development - Massachusetts Institute of Technology S4595 12.910 167,656 - Subtotal - Research and Technology Development 2,151,100 - Subtotal - Department of Defense - Pass-through 2,439,193 - Subtotal - Department of Defense 8,489,838 1,180,216 Total Research and Development Cluster 183,068,306 14,769,557 Total Expenditures of Federal Awards $ 183,068,306 $ 14,769,557

The accompanying note is an integral part of this schedule. 29 The Broad Institute, Inc. Note to Schedule of Expenditures of Federal Awards June 30, 2019

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. and its subsidiaries (the “Institute”), and was prepared using the cash basis of accounting. 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). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. The Institute applies its predetermined approved facilities and administrative rate when charging indirect costs to federal awards rather than the 10% de minimis cost rate as described in Section 200.414 of the Uniform 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.

30

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 subsidiaries (the “Institute”), which comprise the consolidated statement of financial position as of June 30, 2019 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 30, 2019, which included an emphasis of matter paragraph related to the Institute changing the manner in which it presents net assets and reports certain aspects of its financial statements as a not- for-profit entity in 2019 as discussed in 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”) to determine 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 determination of financial statement amounts. 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, MA 02210 T: (617) 530 5000, F: (617) 530 5001, 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 30, 2019

32

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 subsidiaries’ (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, 2019. 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 subsidiaries 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, 2019.

PricewaterhouseCoopers LLP, 101 Seaport Boulevard, Suite 500, Boston, MA 02210 T: (617) 530 5000, F: (617) 530 5001, www.pwc.com/us

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 30, 2019

34

Part III – Findings and Questioned Costs

The Broad Institute, Inc. Schedule of Findings and Questioned Costs Year Ended June 30, 2019

Section I – Summary of Auditor’s Results Financial Statements Type of auditor’s report issued: Unmodified Opinion 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: Unmodified Opinion

Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? yes X 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

Section II – Financial Statement Findings

None noted.

Section III - Federal Award Findings and Questioned Costs

None noted.

35 The Broad Institute, Inc. Summary Schedule of Prior Audit Findings Year Ended June 30, 2019

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

36