Financial Statements December 31, 2017 (With Independent ...

MARCH OF DIMES INC. Financial Statements December 31, 2017

(With Independent Auditors' Report Thereon)

KPMG LLP 345 Park Avenue New York, NY 10154-0102

Independent Auditors' Report

To the Board of Trustees March of Dimes Inc.:

We have audited the accompanying financial statements of the March of Dimes Inc., which comprise the balance sheet as of December 31, 2017, 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 U.S. generally accepted accounting principles; 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. 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 auditors' 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 organization'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 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 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 financial statements referred to above present fairly, in all material respects, the financial position of March of Dimes Inc. as of December 31, 2017, and the changes in its net assets and its cash flows for the year then ended in accordance with U.S. generally accepted accounting principles.

KPMG LLP is a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.

Report on Summarized Comparative Information We have previously audited the March of Dimes Inc.'s 2016 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated May 11, 2017. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2016 is consistent, in all material respects, with the audited financial statements from which it has been derived. June 20, 2018

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MARCH OF DIMES INC. Balance Sheet

December 31, 2017, with comparative amounts as of December 31, 2016 (Amounts in thousands)

Assets

Cash and cash equivalents Sponsorships and other receivables Investment receivable Inventory and other assets Investments Assets held in trust by others Assets held for sale ? net Land, building and equipment ? net

Total assets

Liabilities and Net Assets

Accounts payable and accrued expenses Grants and awards payable ? net Refundable advances and deferred revenue Accrued pension and postretirement benefit obligation

Total liabilities

Commitments and contingencies

Net assets (deficit): Unrestricted: Operating Accrued pension and postretirement benefit obligation

Total unrestricted

Temporarily restricted Permanently restricted

Total net assets (deficit)

Total liabilities and net assets (deficit)

2017

$

12,014

9,595

36

3,431

36,065

11,062

3,597

2,211

$

78,011

$

12,564

12,184

3,417

60,726

88,891

30,092 (60,726)

(30,634)

5,948 13,806

(10,880)

$

78,011

See accompanying notes to financial statements.

2016 18,633 9,418 548 4,706 43,317 10,382 -- 7,166 94,170

14,905 19,746

3,943 68,479 107,073

37,553 (68,479) (30,926)

5,206 12,817 (12,903) 94,170

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MARCH OF DIMES INC. Statement of Activities

Year ended December 31, 2017, with summarized totals for the year ended December 31, 2016 (Amounts in thousands)

Unrestricted

Operating activity: Revenue: Campaign contributions and sponsorships Less direct benefits to donors and sponsors

$

148,554

(11,913)

Net campaign contributions and sponsorships

136,641

Bequests Government, foundation and corporate grants Major gifts and other contributions Contributed materials and services Investment return appropriated for operations Program service revenue Other Net assets released from restrictions

1,322 8,063 5,884 1,075 1,101 1,039

838 1,054

Total revenue

157,017

Expenses: Program services: Research and medical support Public and professional education Community services

21,064 57,950 36,580

Total program services

115,594

Supporting services: Management and general Fund raising

15,175 22,988

Total supporting services

38,163

Total expenses

153,757

Excess (deficiency) of operating revenue over expenses

3,260

Nonoperating activity: Investment return greater than amount appropriated for operations Net increase in fair value of assets held in trust by others Pension and postretirement costs other than net periodic benefit costs

1,052 --

(4,020)

Change in net assets

292

Net assets (deficit) at beginning of year

(30,926)

Net assets (deficit) at end of year

$

(30,634)

Temporarily restricted

-- -- -- 20 532 425 -- 399 -- -- (1,054) 322

-- -- -- --

-- -- -- -- 322

354 66

-- 742 5,206 5,948

Permanently restricted

-- -- -- -- -- -- -- -- -- -- -- --

-- -- -- --

-- -- -- -- --

-- 989

-- 989 12,817 13,806

2017 Total

148,554 (11,913) 136,641

1,342 8,595 6,309 1,075 1,500 1,039

838 --

157,339

21,064 57,950 36,580 115,594

15,175 22,988 38,163 153,757

3,582

1,406 1,055

(4,020) 2,023 (12,903) (10,880)

See accompanying notes to financial statements.

2016 Total

167,504 (13,880) 153,624

1,440 3,719 4,924 1,370 3,100 1,415 2,395

-- 171,987

26,096 64,686 44,008 134,790

19,451 25,167 44,618 179,408 (7,421)

1,101 132

(20,130) (26,318) 13,415 (12,903)

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MARCH OF DIMES INC. Statement of Functional Expenses Year ended December 31, 2017, with summarized totals for the year ended December 31, 2016

(Amounts in thousands)

Research

Grants and awards

$

Salaries and employee benefits

Professional fees

Printing, supplies, postage and shipping

Occupancy and telephone

Travel, lodging, conferences and meetings

Equipment and maintenance

Facilities rental, catering, entertainment, etc.

Other

Depreciation of building and equipment

17,162 1,648 1,210 129 54 572 121 -- 62 106

Total expenses

$

21,064

Program Services

Public and

Professional Community

Education

Services

2,794 25,943

8,903 14,711

2,769 1,533

543 --

262 492

957 25,458

3,560 1,023 3,334 1,084

646 --

187 331

57,950

36,580

Total

20,913 53,049 13,673 15,863

6,157 3,189 1,310

-- 511 929

115,594

Supporting Services

Management

and

Fund

General

Raising

-- 7,105 2,335 3,932

787 261 453

-- 118 184

-- 9,517 5,100 6,100 1,098

384 430

-- 136 223

15,175

22,988

Total

-- 16,622

7,435 10,032

1,885 645 883 -- 254 407

38,163

See accompanying notes to financial statements.

Total 2017

20,913 69,671 21,108 25,895

8,042 3,834 2,193

-- 765 1,336

153,757

Total 2016

22,344 87,981 19,177 28,338

9,510 7,088 2,244

-- 1,000 1,726

179,408

Direct Benefits

to Donors

and Sponsors

2017

2016

-- -- -- 2,507 -- -- -- 9,406 -- --

-- -- -- 3,285 -- -- -- 10,595 -- --

11,913

13,880

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MARCH OF DIMES INC. Statement of Cash Flows Year ended December 31, 2017, with summarized totals for the year ended December 31, 2016 (Amounts in thousands)

2017

Cash flows from operating activities:

Change in net assets

$

Adjustments to reconcile change in net assets to net cash used in

operating activities:

Depreciation

Net appreciation in fair value of investments

Net increase in fair value of assets held in trust by others

Pension and postretirement charge other than net periodic

benefit cost

Changes in operating assets and liabilities:

Sponsorships and other receivables

Assets held in trust by others

Inventory and other assets

Accounts payable and accrued expenses

Grants and awards payable

Refundable advances and deferred revenue

Accrued postretirement and pension benefit obligation

2,023

1,336 (2,015) (1,055)

4,020

(177) 375 1,275 (2,341) (7,562) (526) (11,773)

Net cash used in operating activities

(16,420)

Cash flows from investing activities: Purchase of fixed assets Loss on disposal of fixed assets Investment receivable Purchase of investments Proceeds from sale of investments

(32) 54 512 (29,938) 39,205

Net cash provided by investing activities

9,801

Cash flows from financing activities: Proceeds from line of credit Payments on line of credit

10,000 (10,000)

Net cash used in financing activities

--

Net (decrease) increase in cash and cash equivalents

(6,619)

Cash and cash equivalents at beginning of year

18,633

Cash and cash equivalents at end of year

$

12,014

Supplemental disclosures: Interest paid Contributed materials and services

$

78

1,075

2016

(26,318)

1,726 (3,118)

(132)

20,130

(1,341) --

828 (1,093) (2,900) 1,694 (5,206) (15,730)

(125) --

4,532 (15,800) 37,310 25,917

10,000 (15,000)

(5,000) 5,187 13,446 18,633

103 1,370

See accompanying notes to financial statements.

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MARCH OF DIMES INC. Notes to Financial Statements Year ended December 31, 2017, with comparative amounts for the year ended December 31, 2016

(Amounts in thousands)

(1) Organization and Summary of Significant Accounting Policies (a) Organization The mission of the March of Dimes Inc. (the Organization), formerly March of Dimes Foundation, is to lead the fight for the health of all moms and babies. The Organization carries out this mission through programs of research and medical support, community services, public and professional education, and advocacy. Building on a successful 80-year legacy of impact and innovation, the Organization stands up for every mom and every baby.

The Organization has been classified as an organization that is not a private foundation under Section 509(a)(1) and has been designated as a "publicly supported" organization under Section 170(b)(1) (A)(vi) of the U.S. Internal Revenue Code (the Code) and as such is exempt from federal income tax under Section 501(c)(3) of the Code.

The Organization is a not-for-profit voluntary health agency and contributions to it are tax deductible as prescribed by the Code.

(b) Basis of Presentation The financial statements include the accounts of the Organization's offices and operating units in the United States. All significant intra-Organization accounts and transactions have been eliminated.

The accompanying financial statements have been prepared to focus on the Organization as a whole and to present balances and transactions according to the existence or absence of donor-imposed restrictions. Accordingly, the net assets of the Organization and changes therein are classified and reported as follows:

Unrestricted Net Assets ? Net assets resulting from revenue whose use by the Organization is not subject to donor-imposed restrictions.

Temporarily Restricted Net Assets ? Net assets resulting from revenue whose use by the Organization is limited by donor-imposed stipulations that either expire by the passage of time or can be fulfilled and removed by actions of the Organization pursuant to those donor-imposed stipulations.

Permanently Restricted Net Assets ? Net assets resulting from revenue whose use by the Organization is limited by donor-imposed stipulations that neither expire by the passage of time nor can be fulfilled or otherwise removed by actions of the Organization.

Revenues are reported as increases in unrestricted net assets unless their use is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Gains and losses on investments are reported as increases or decreases in unrestricted net assets unless their use is restricted by donors or state law. Expirations of temporary restrictions on net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the required time period has elapsed) are reported as net assets released from restrictions.

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