U.S. Department of State Fiscal Year 2020 Agency Financial Report

14 S tatement of N et C ost The Consolidated Statement of Net Cost reports the Department’s gross cost and net cost by strategic goal. The net cost of operations is the gross (i.e., total) cost incurred by the Department, less any exchange (i.e., earned) revenue. The Consolidating Schedule of Net Cost categorizes costs and revenues by major program and responsibility segment. A responsibility segment is the component that carries out a mission or major line of activity, and whose managers report directly to top management. For the Department, a Bureau (e.g., Bureau of African Affairs) is considered a responsibility segment. For presentation purposes, Bureaus have been summarized and reported at the Under Secretary level (e.g., Under Secretary for Political Affairs). CONSOL IDATING SCHEDULE OF NET COST For the Year Ended September 30, 2020 (dollars in millions) Under Secretary for Intra- Departmental Eliminations Total STRATEGIC GOAL Arms Control, Int’l Security Management- Consular Affairs Civilian Security, Democracy and Human Rights Economic Growth, Energy and Environment Political Affairs Public Diplomacy and Public Affairs SG1: Protect America's Security at Home and Abroad Total Cost $ 487 $ 2,181 $ 1,408 $ 21 $ 3,245 $ 292 $ (80) $ 7,554 Earned Revenue (29) (1,697) (9) — (174) (4) 49 (1,864) Net Program Costs 458 484 1,399 21 3,071 288 (31) 5,690 SG2: Renew America's Competitive Advantage for Sustained Economic Growth and Job Creation Total Cost 27 36 17 63 1,833 167 (30) 2,113 Earned Revenue (4) (27) 1 — (81) (2) 21 (92) Net Program Costs 23 9 18 63 1,752 165 (9) 2,021 SG3: Promote American Leadership through Balanced Engagement Total Cost 165 22 12,834 16 1,491 203 (22) 14,709 Earned Revenue (9) (16) (2) — (54) (2) 15 (68) Net Program Costs 156 6 12,832 16 1,437 201 (7) 14,641 SG4: Ensure Effectiveness and Accountability to the American Taxpayer Total Cost 189 1,382 145 67 16,687 607 (5,116) 13,961 Earned Revenue (31) (6,393) 5 — (3,333) (5) 5,028 (4,729) Net Program Costs 158 (5,011) 150 67 13,354 602 (88) 9,232 Actuarial Loss on Pension Assumption Changes 10 76 8 4 924 34 — 1,056 Net Program Costs 168 (4,935) 158 71 14,278 636 (88) 10,288 Cost Not Assigned to Programs Total Cost — — 14 — 8 4 (27) (1) Earned Revenue (1) — — — (28) — 27 (2) Net Costs (1) — 14 — (20) 4 — (3) Total Cost 878 3,697 14,426 171 24,188 1,307 (5,275) 39,392 Total Revenue (74) (8,133) (5) — (3,670) (13) 5,140 (6,755) Total Net Cost $ 804 $ (4,436) $ 14,421 $ 171 $ 20,518 $ 1,294 $ (135) $ 32,637 Certain 2019 amounts in the Consolidated Statement of Net Cost have been reclassified to conform to the 2020 presentation. The presentation of program results by strategic goals is based on the Department’s current Strategic Plan, established pursuant to the Government Performance 2020 A gency F inanci al R eport U ni ted S tates D epartment of S tate | 97 NOTES TO THE PRINCIPAL FINANCIAL STATEMENTS | FINANCIAL SECTION