THE AMERICAN NATIONAL RED CROSS - American Red …

1 THE AMERICAN NATIONAL RED CROSS Consolidated financial Statements June 30, 2020 (With summarized information for the year ended June 30, 2019) (With Independent Auditors Report Thereon) Independent Auditors Report The Board of Governors The AMERICAN NATIONAL Red CROSS : We have audited the accompanying consolidated financial statements of The AMERICAN NATIONAL Red CROSS (the Organization), which comprise the consolidated statement of financial position as of June 30, 2020, and the related consolidated statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

2 Management s Responsibility for the Consolidated financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with generally accepted accounting principles; 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 these consolidated financial statements based on our audit.

3 We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.

4 In making those risk assessments, the auditor considers internal control relevant to the organization 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 organization 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.

5 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 financial position of The AMERICAN NATIONAL Red CROSS as of June 30, 2020, and the changes in their net assets and their cash flows for the year then ended, in accordance with generally accepted accounting principles. KPMG LLPS uite 9008350 Broad StreetMcLean, VA 22102 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

6 2 Emphasis of Matter As discussed in note 1(r) to the consolidated financial statements, in 2020 The AMERICAN NATIONAL Red CROSS adopted new accounting guidance, Accounting Standards Update (ASU) No. 2018-08 Not for Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made, ASU No. 2016-02, Leases (Topic 842), ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, and ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.

7 Our opinion is not modified with respect to this matter. Report on Summarized Comparative Information We have previously audited The AMERICAN NATIONAL Red CROSS 2019 consolidated financial statements, and we expressed an unmodified audit opinion on those audited consolidated financial statements in our report dated October 23, 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 consolidated financial statements from which it has been derived.

8 McLean, Virginia October 21, 2020 THE AMERICAN NATIONAL RED CROSSC onsolidated Statement of financial PositionJune 30, 2020(With comparative information as of June 30, 2019)(In thousands)Assets20202019 Current assets:Cash and cash equivalents$235,415 101,101 Investments (note 4)348,443 460,187 Trade receivables, including grants, net of allowance for doubtful accounts of $1,700in 2020 and $2,364 in 2019 (note 11)286,464 196,172 Contributions receivable (note 2)34,368 31,948 Inventories, net of allowance for obsolescence of $180 in 2020 and $178 in 201946,998 38,800 Other current assets50,989 49,516 Total current assets1,002,677 877,724 Noncurrent assets.

9 Investments (note 4)1,087,477 1,067,866 Contributions receivable (note 2)14,191 14,689 Right-of-use assets-operating leases (note 6)114,474 Land, buildings, and other property, net (note 3)755,519 798,466 Assets held for sale, net (note 3)30,960 35,740 Other assets (note 9)261,601 255,419 Total noncurrent assets2,264,222 2,172,180 Total assets$3,266,899 3,049,904 Liabilities and Net AssetsCurrent liabilities:Accounts payable and accrued expenses$253,123 272,134 Current portion of debt (note 5)41,265 43,888 Current portion of lease obligation-operating (note 6)22,689 Postretirement benefits (note 10)3,779 3,824 Other current liabilities (notes 9 and 11)145,970 133,210 Total current liabilities466,826 453,056 Noncurrent liabilities.

10 Debt (note 5)596,132 537,413 Long-term lease obligation-operating (note 6)104,096 Pension and postretirement benefits (note 10)155,924 495,161 Other liabilities (notes 5 and 9)131,706 122,110 Total noncurrent liabilities987,858 1,154,684 Total liabilities1,454,684 1,607,740 Net assets (notes 7 and 8):Without donor restrictions net assets (deficit)390,796 (5,469) With donor restrictions net assets1,421,419 1,447,633 Total net assets1,812,215 1,442,164 Commitments and contingencies (notes 4, 5, 6, 10, 11)Total liabilities and net assets$3,266,899 3,049,904 See accompanying notes to consolidated financial AMERICAN NATIONAL RED CROSSC onsolidated Statement of ActivitiesYear ended June 30, 2020(With summarized information for the year ended June 30, 2019)(In thousands)