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Financial Statements and Federal Reporting Contents Bigelow Laboratory for Ocean Sciences June 30, 2020

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Financial Statements and Federal Reporting Contents Bigelow Laboratory for Ocean Sciences June 30, 2020 Financial Statements June 30, 2020 Financial Statements and Federal Reporting Contents Bigelow Laboratory for Ocean Sciences June 30, 2020 Financial Statements: Independent Auditors’ Report . 1 Statement of Financial Position . 3 Statement of Activities . 4 Statement of Functional Expenses. 5 Statement of Cash Flows . 6 Notes to Financial Statements . 7 Independent Auditors’ Report 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 . 24 Federal Reporting: Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance. 26 Schedule of Expenditures of Federal Awards . 29 Notes to Schedule of Expenditures of Federal Awards . 30 Schedule of Findings and Questioned Costs . 31 Independent Auditors’ Report To the Board of Trustees Bigelow Laboratory for Ocean Sciences East Boothbay, Maine Report on Financial Statements We have audited the accompanying financial statements of Bigelow Laboratory for Ocean Sciences (a nonprofit organization), which comprise the statement of financial position as of June 30, 2020, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these 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 financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the 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 entity’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 financial statements. 1 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 financial statements referred to above present fairly, in all material respects, the financial position of Bigelow Laboratory for Ocean Sciences as of June 30, 2020, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited Bigelow Laboratory for Ocean Sciences’s 2019 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated December 13, 2019. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2019, is consistent, in all material respects, with the audited financial statements from which it has been derived. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 26, 2021, on our consideration of Bigelow Laboratory for Ocean Sciences’ internal control over financial reporting and on tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is 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 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 Bigelow Laboratory for Ocean Sciences’ internal control over financial reporting and compliance. Professional Association Portland, Maine February 26, 2021 2 Statement of Financial Position Bigelow Laboratory for Ocean Sciences As of June 30, 2020 (with comparative totals for June 30, 2019) 2020 2019 Current Assets Cash and cash equivalents $ 2,954,111 $ 707,320 Cash restricted for improvements - 36,044 Cash restricted for research 4,333,917 1,560,328 Contracts and grants receivable 748,925 1,675,837 Pledges receivable, current 160,059 375,666 Accounts receivable, net 249,155 206,908 Prepaid expenses 46,177 76,169 Total Current Assets 8,492,344 4,638,272 Property and Equipment, net of accumulated depreciation 35,761,704 36,891,086 Other Assets Pledges receivable long-term, net 400,785 237,825 Investments 4,815,603 6,265,177 Investments - endowment 4,329,882 3,152,884 9,546,270 9,655,886 Total Assets $ 53,800,318 $ 51,185,244 Current Liabilities Accounts payable $ 300,567 $ 389,639 Accrued payroll and other expenses 570,781 456,445 Current portion of notes payable 309,511 160,326 Promissory note - Paycheck Protection Program 1,339,900 - Deferred revenue 3,101,239 1,722,378 Total Current Liabilities 5,621,998 2,728,788 Long-Term Liabilities Notes payable, net of current portion 12,744,163 13,053,674 Less: unamortized debt issuance costs (157,482) (162,866) Swap contract 2,924,973 984,678 15,511,654 13,875,486 Total Liabilities 21,133,652 16,604,274 Net Assets Net assets without donor restrictions 12,855,587 12,762,596 Net assets with donor restrictions 19,811,079 21,818,374 Total Net Assets 32,666,666 34,580,970 Total Liabilities and Net Assets $ 53,800,318 $ 51,185,244 See accompanying independent auditors' report and notes to financial statements. 3 Statement of Activities Bigelow Laboratory for Ocean Sciences For the Year Ended June 30, 2020 (with comparative totals for June 30, 2019) 2020 2019 Net Assets without Net Assets with Donor Restrictions Donor Restrictions Total Total Revenues and Other Support Grants and contracts$ 8,229,743 $ 204,545 $ 8,434,288 $ 8,445,975 Contributions 2,957,781 477,926 3,435,707 2,827,732 Course fees 474,037 - 474,037 574,910 Other income 1,439,241 - 1,439,241 1,027,006 Net gain on investments (12,044) 110,658 98,614 229,999 Net assets released from restrictions 853,619 (853,619) - - Total Revenues and Other Support 13,942,377 (60,490) 13,881,887 13,105,622 Expenses Research and education 7,994,332 - 7,994,332 7,806,625 Management and general 5,029,721 - 5,029,721 4,286,460 Development 831,843 -831,843 746,914 Total Expenses 13,855,896 - 13,855,896 12,839,999 Revenues Over (Under) Expenses 86,481 (60,490) 25,991 265,623 Non-Operating Revenue, Gains, and Losses Loss on interest rate swap (1,940,295) - (1,940,295) (984,678) Increase (Decrease) in Net Assets (1,853,814) (60,490) (1,914,304) (719,055) Net assets at beginning of year 12,762,596 21,818,374 34,580,970 35,300,025 Reclassification 1,946,805 (1,946,805) - - Net Assets at End of Year $ 12,855,587 $ 19,811,079 $ 32,666,666 $ 34,580,970 See accompanying independent auditors' report and notes to financial statements. 4 Statement of Functional Expenses Bigelow Laboratory for Ocean Sciences For the Year Ended June 30, 2020 (with comparative totals for June 30, 2019) 2020 2019 Research & Management Education & General Development Total Total Personnel Salaries and wages $ 2,976,224 $ 1,730,823 $ 375,940 $ 5,082,987 $ 4,599,353 Fringe benefits 1,417,342 776,263 194,225 2,387,830 2,127,214 Total Personnel 4,393,566 2,507,086 570,165 7,470,817 6,726,567 Other Expenses Subcontracts 666,748 - - 666,748 560,770 Supplies and leases 783,309 84,955 4,771 873,035 842,186 Participant support 255,807 15,277 852.00 271,936 302,023 Publications, books and periodicals 26,843 11,290 - 38,133 56,160 Dues and licenses 11,483 96,168 11,049 118,700 101,293 Travel 131,477 35,307 23,934 190,718 188,601 Shipment costs 59,344 - - 59,344 72,138 Telephone 2,637 38,713 4,324 45,674 66,553 Utilities 18,104 304,917 - 323,021 353,677 Equipment - federal 17,412 - - 17,412 - Equipment - non-federal 18,982 33,747 - 52,729 16,489 Repairs and maintenance 20,061 40,435 - 60,496 52,816 Shipping and postage 70,433 9,759 6,682 86,874 103,721 Consulting and contracted services 157,192 352,371 3,634 513,197 430,509 Professional fees 43,565 69,089 1,605 114,259 85,149 Insurance 552 121,016 - 121,568 111,220 Depreciation and amortization 1,260,059 719,024 163,521 2,142,604 2,095,499 Interest 3,025 532,060 - 535,085 511,649 Technical services 5,376 8,045 - 13,421 8,624 Training 13,949 3,142 1,917 19,008 32,281 Other 34,408 47,320 39,389 121,117 122,074 Total Other Expenses 3,600,766 2,522,635 261,678 6,385,079 6,113,432 Total Expenses Before Overhead Charge 7,994,332 5,029,721 831,843 13,855,896 12,839,999 Overhead Charged to Direct Research Costs and Development 3,637,686 (3,896,089) 258,403 - - $ 11,632,018 $ 1,133,632 $ 1,090,246 $ 13,855,896 $ 12,839,999 See accompanying independent auditors' report and notes to financial statements.
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