COMBINED AUDITED FINANCIAL STATEMENTS

WFCR-FMAND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC.

Amherst, Massachusetts

JUNE 30, 2019

Boisselle, Morton & Wolkowicz, LLP Certified Public Accountants WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC.

Table of Contents

Page Independent Auditors' Report 1-2 Combined Statement of Financial Position 3 Combined Statement of Activities 4 Combined Statement of Functional Expenses 5 Combined Statement of Cash Flows 6 Notes to the Combined Financial Statements 7-18 BorssELLE, MoRTON & WoLKowrcz, LLP CE R TIFIED PUBL I C ACCOU N TA NT S

Independent Auditors' Report

To the Board of Trustees University of Massachusetts Amherst, Massachusetts

Report on the Financial Statements

We have audited the accompanying combined financial statements of WFCR-FM and New England Public Radio Foundation, Inc. (the "Organization"), which comprise the combined statement of financial position as of June 30, 2019, and the related combined statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the combined financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these combined 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 combined 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 combined 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 combined 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

48 B AY R OAD, PO Box 374, H ADLEY, MA 01035 • 413-587-0099 • FAX 413 -587-4099 • www.bma-cpas.com Board of Trustees University of Massachusetts Page 2

Opinion

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of WFCR-FM and New England Public Radio Foundation, Inc. as of June 30, 2019, and the changes in net assets and 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 WFCR-FM and New England Public Radio Foundation, Inc. 's June 30, 2018 combined financial statements, and we expressed an unmodified audit opinion on those audited combined financial statements in our report dated November 19, 2018. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2018, is consistent, in all material respects, with the audited combined financial statements from which it has been derived.

Hadley, Massachusetts November 19, 2019

Bo!SSELLE, MORTON & WOLKOWICZ, LLP • CERTIFIED PuBLIC ACCOUNTANTS WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Combined Statement of Financial Position June 30, 2019 (with comparative totals for June 30, 2018)

Current assets Cash and cash equivalents $ 115,725 $ 226,532 Accounts receivable 650 700 Accounts receivable - underwriting, net 148,628 97,005 Pledges receivable, net - current portion 804,552 659,070 Investments 26,314 24,964 Prepaid expenses 1,705 1,705 Total current assets 1,097,574 1,009,976

Cash - restricted 196,3 75 227,301 Pledges receivable, net - less current portion 63,285 48,602 Investments, long-term 14,050 13,813 Note receivable 4,246,420 4,246,420 Property and equipment, net 6,575,525 6,917,236 Loan acquisition costs, net 146,287 152,061

Total assets $ 12,339,516 $ 12,615,409

Liabilities and Net Assets

Current liabilities Accounts payable $ 216,565 $ 113,627 Accrued salaries and wages 55,146 47,266 Accrued compensated absences 199,988 200,470 Due to UMass 164,982 233,799 Current portion of notes payable 307,998 307,609 Total current liabilities 944,679 902,771

Long-term liabilities Accrued compensated absences 57,171 55,736 Notes payable 6,427,799 6,482,775 Total long-term liabilities 6,484,970 6,538,511

Net assets Without donor restrictions 4,441 ,5 56 4,806,798 With donor restrictions 468,311 367,329 Total net assets 4,909,867 5,174,127

Total liabilities and net assets $ 12,339,516 $ 12,615,409

The accompanying notes are an integral part of these combined financial statements. - 3 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Combined Statement of Activities Year Ended June 30, 2019 (with comparative totals for the year ended June 30, 2018)

2019 Without Donor With Donor 2018 Restrictions Restrictions Total Total

Support, revenue and gains Contributions, net $ 2,269,749 $ 562,300 $ 2,832,049 $ 2,849,412 Underwriting, net 1,674,522 1,674,522 1,669,941 Special events 43 ,845 43 ,845 46,502 Support from Amherst, Hampshire, Mount Holyoke and Smith Colleges 46,172 46,172 57,715 Services and facilities in-kind from UMass 684,078 684,078 721 ,164 Corporation for Public Broadcasting grant 317,758 317,758 311 ,526 Interest and dividend income 30,655 78 30,733 30,889 Net investment gains (losses) 1,810 1,810 2,554 Other income 20,597 20,597 14,274 In-kind revenue 314,138 314,138 305,986 Available for appropriation 493 (493) Net assets released from restrictions 462,713 (462,713) Total support, revenue and gains 5,864,720 100,982 5,965,702 6,009,963 Expenses Program services Programming 2,879,146 2,879,146 2,649,470 Operations 817,590 817,590 942,357 Program information 453,385 453,385 458,852 Total program services 4,150,121 4,150,121 4,050,679

Support services Fundraising and grant solicitation 1,384,764 1,384,764 1,337,432 General and administrative 695,077 695,077 691 ,614 Total support services 2,079,841 2,079,841 2,029,046

Total expenses 6,229,962 6,229,962 6,079,725

Change in net assets (365,242) 100,982 (264,260) (69,762)

Net assets - beginning of year 4,806,798 367,329 5,174,127 5,243 ,889

Net assets - end of year $ 4,441 ,556 $ 468,311 $ 4,909,867 $ 5,174,127

The accompanying notes are an integral part of these combined financial statements. - 4 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Combined Statement of Functional Expenses Year Ended June 30, 2019 (with comparative totals for the year ended June 30, 2018)

2019

Total Fundraising Total Program Program and Grant General & Support 2018 Programming Oeerations Information Services Solicitation Administrative Services Total Total

Salaries, wages & benefits $ 1,333,657 $ 289,013 $ 181 ,089 $ 1,803,759 $ 374,683 $ 357,237 $ 731 ,920 $ 2,535,679 $ 2,483,727 Professional services 51 ,976 14,037 47,278 11 3,29 1 537,088 146,257 683,345 796,636 715,492 Program acquisitions 722,769 722,769 722,769 695,555 Services & facilities, in-kind 316,638 89,916 49,862 456,416 152,292 75 ,370 227,662 684,078 721 ,164 Depreciation 341 ,545 1,3 82 342,927 3,551 7,861 11 ,412 354,339 371 ,442 Service & supplies, in-kind 51 ,908 168,936 220,844 88 ,744 4,550 93 ,294 314,138 305,986 Other expenses 53,218 418 3,494 57,130 119,049 47,738 166,787 223 ,917 160,675 Occupancy 223 ,357 223,357 223 ,357 255,446 Interest 35, 183 35 ,183 40,204 40,204 75 ,387 76,339 Computer maintenance & license fees 69,802 69,802 69,802 39,322 Printing, publications & graphics 1,090 1,090 34,772 507 35 ,279 36,369 36,895 Program production costs 32,410 32,410 32,410 32,559 Postage & shipping 31,661 400 32,061 32,061 35,147 Membership dues 14,301 14,301 8,215 7,000 15,215 29,516 26,167 Telephone 20,067 254 20,321 1,105 1,107 2,212 22,533 25,901 Travel 6,858 2,128 8,986 4,737 2,597 7,334 16,320 9,015 Equipment 14,685 14,685 14,685 22,503 Premiums 12,271 12,271 12,271 20,987 Mailing services 12,078 12,078 12,078 14,271 Amortization 5,774 5,774 5,774 5,774 Rental & maintenance of equipment 4,422 4,422 4,422 10,093 Conferences & meetings 3,706 323 4,029 4,029 2,997 Office supplies 3,849 3,849 3,849 4,805 Full cost overhead 2,654 2,654 812 77 889 3,543 3,665 Advertising 3,798

Total expenses $ 2,879,146 $ 817,590 $ 453 ,385 $ 4,150,121 $ 1,384,764 $ 695,077 $ 2,079,841 $ 6,229,962 $ 6,079,725

The accompanying notes are an integral part of these financi al statements. - 5 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Combined Statement of Cash Flows Year Ended June 30, 2019 (with comparative totals for the year ended June 30, 2018)

2019 2018 Cash flows from operating activities Change in net assets $ (264,260) $ (69,762) Adjustments to reconcile change in net assets to net cash used by operating activities Capital campaign contributions (51,314) (33,823) Depreciation 354,339 371,442 Amortization 5,774 5,774 Change in allowance for doubtful accounts 68, 101 66,362 Net investment gains (1 ,813) (2,554) Changes in operating assets and liabilities Accounts and pledges receivable (279,839) (291 ,430) Accounts payable and accrued expenses 111 ,771 (49,066) Due to UMass (68,817) (117,410)

Net cash used by operating activities (126,058) (120,467)

Cash flows from investing activities Net proceeds from investments 226 48 Purchases of property and equipment (12,628) (9,636) Net cash used by investing activities (12,402) (9,588)

Cash flows from financing activities Borrowings on line of credit 174,571 165,089 Payments on line of credit (174,571) (165,089) Capital campaign contributions 51,314 33,823 Restricted asset management fee reserve activity 30,926 30,927 Payments on note payable (54,587) (47,213)

Net cash provided by financing activities 27,653 17,537

Net decrease in cash and cash equivalents (I 10,807) (I 12,518)

Cash and cash equivalents - beginning of year 226,532 339,050

Cash and cash equivalents - end of year $ 115,725 $ 226,532

Supplemental disclosure of cash flow information Non-cash investing activity Disposal of fully-depreciated equipment $ 33 ,404 $ 35,180

Interest paid $ 65 ,633 $ 68,344

The accompanying notes are an integral part of these combined financial statements. - 6 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements June 30, 2019

1. Summary of Significant Accounting Policies Organization: WFCR-FM is a non-commercial public radio station licensed and owned by the University of Massachusetts, Amherst, Massachusetts (UMass). The radio station is operated with the advice and support of Amherst, Hampshire, Mount Holyoke, and Smith Colleges and the University of Massachusetts, Amherst. New England Public Radio Foundation, Inc. solicits funds in the name of and with the approval of WFCR-FM for the exclusive use in the operations of WFCR-FM. New England Public Radio Foundation, Inc. also includes its affiliate, NEPR Foundation Real Estate, Inc. The Affiliate is a nonprofit Massachusetts corporation that was organized as a supporting organization to New England Public Radio Foundation, Inc. The Affiliate's purpose is to purchase, develop, and rehabilitate real and personal property and lease the same to New England Public Radio Foundation, Inc. WFCR-FM and New England Public Radio Foundation, Inc. and affiliate are collectively referred to herein as "the Organization."

Income Taxes: WFCR-FM is a component unit of UMass, which is a component unit of the Commonwealth of Massachusetts, and is, therefore, generally exempt from federal and state income taxes under section 115(a) of the Internal Revenue Code. Therefore, no provision for federal and state income taxes has been included in these combined financial statements.

New England Public Radio Foundation, Inc. has been granted an exempt status under Internal Revenue Code ("IRC") section 501(a) as an organization described under Internal Revenue Code Section 501(c)(3). Under IRC 501(a), New England Public Radio Foundation, Inc. is generally exempt from federal and state income taxes. Therefore, no provision for federal and state income taxes has been included in these combined financial statements.

NEPR Foundation Real Estate, Inc. has been determined to be a Type I supporting Section 509(a)(3) IRC. NEPR Foundation Real Estate, Inc. has been granted an exempt status under IRC section 501(a) as an organization described under Internal Revenue Code Section 501(c)(3). Under IRC 501(a), NEPR Foundation Real Estate, Inc. is generally exempt from federal and state income taxes. Therefore, no provision for federal and state income taxes has been included in these financial statements.

Accounting Pronouncement Adopted: On August 18, 2016, F ASB issued Accounting Standards Update (ASU) 2016-14, Not-for-Profit Entities (Topic 958) - Presentation of Financial Statements of Not-for-Profit Entities. The update addresses the complexity and understandability of net asset classification and deficiencies in information about liquidity and availability of resources, and the lack of consistency in the type of information provided about expenses and investment return. The Organization has adjusted the presentation in these financial statements accordingly. The ASU has been applied retrospectively to all periods presented.

- 7 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements (Continued) June 30, 2019

1. Summary of Significant Accounting Policies (Continued)

Accounting Method: The combined financial statements include the accounts of WFCR-FM and New England Public Radio Foundation, Inc. (including NEPR Foundation Real Estate, Inc.), a nonprofit Massachusetts corporation, as required by accounting principles generally accepted in the United States of America. All significant intercompany transactions have been eliminated. The combined financial statements have been prepared on the accrual basis of accounting.

Basis of Presentation: The net assets of the Organization are reported in each of the following two classes when applicable: net assets without donor restrictions and with donor restrictions. Net assets of the restricted class are created only by donor-imposed restrictions on their use. All other net assets are without donor restrictions and are reported as part of that class.

Use of Estimates: The preparation of combined financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash Equivalents: For purposes of the combined statement of cash flows, the Organization considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents.

Accounts Receivable: Accounts receivable consists primarily of corporate matching gifts. All corporate matching gifts that are determined to be collectible are expected to be received within one year. The Organization estimates an allowance for doubtful accounts by specifically identifying those accounts whose collection is uncertain with a charge to income. Accounts determined to be uncollectible are written off by reversing both the receivable and allowance balances. All accounts receivable were considered collectible by management as of June 30, 2019 and 2018.

Accounts Receivable - Underwriting: The Organization solicits sponsors to underwrite certain on-air programming and records an underwriting receivable at the aggregate unpaid balance less an allowance for doubtful accounts. Credit terms are typically net 30 days, and the Organization does not charge interest on unpaid balances. All amounts determined to be collectible are expected to be received within one year. The Organization estimates an allowance for doubtful accounts by specifically identifying those accounts whose collections are uncertain with a charge to income. Accounts determined to be uncollectible are written off by reversing both the receivable and allowance balances. The allowance for doubtful accounts totaled $1 ,853 and $1 ,780 as of June 30, 2019 and 2018, respectively.

- 8 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements (Continued) June 30, 2019

1. Summary of Significant Accounting Policies (Continued)

Pledges Receivable: The Organization recognizes donor pledges as contribution revenue and the aggregate unpaid balance is recorded as pledges receivable less an allowance for doubtful accounts and present value discount.

The Organization estimates an allowance for doubtful accounts by specifically identifying those accounts whose collection is uncertain with a charge to income or using projected cash collections within the next fiscal year. Accounts determined to be uncollectible are written off by reversing both the receivable and allowance balances. The allowance for doubtful accounts totaled $184,925 and $165,626 as of June 30, 2019 and 2018, respectively.

Investments: Investments consist of marketable equity securities and shares in a UMass pooled investment fund and are stated at fair market value as determined by quoted market prices. Unrealized gains and losses are included in the change in net assets.

Investment securities are exposed to various risks such as interest rate, market and credit risk. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of the investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect the amounts reported in the combined statement of financial position and the combined statement of activities and changes in net assets.

Property and Equipment: Property and equipment is stated at cost less accumulated depreciation or, in the case of donated property, at its estimated fair value at date of receipt. Depreciation on property and equipment is calculated on the straight-line method over the estimated useful lives of the assets, which range from 3 to 31.5 years. Leasehold improvements are amortized over the life of the lease. Expenditures for repairs and maintenance are charged to operating expenses as incurred.

The Organization has a condominium interest in a building on Main Street in Springfield, Massachusetts. The Organization made improvements to the building for the use of New England Public Radio Foundation, Inc. as a radio broadcast studio and professional office. These assets are stated at cost.

The cost of assets sold or retired and the related amounts of accumulated depreciation are eliminated from the accounts in the year of sale or retirement. Any resulting gain or loss is credited or charged to net assets.

Loan Acquisition Costs: The Organization paid $173,233 in legal and other professional fees related to obtaining financing. The Organization has capitalized these costs as an asset and began amortizing them in November 2014, when the building was placed in service. Amortization expense of $5 ,774 was recorded at each of the years ended June 30, 2019 and 2018. Accumulated amortization was $26,946 and $21 ,172 at June 30, 2019 and 2018, respectively.

- 9 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements (Continued) June 30, 2019

1. Summary of Significant Accounting Policies (Continued) Support and Revenue: 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. Expirations of restrictions on net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as reclassifications between the applicable classes of net assets. Donor-restricted contributions whose restrictions are met in the same reporting period are reported as an increase in restricted support and as net assets released from restrictions in the statement of activities.

Contributions, including unconditional promises to give, are recognized as revenues in the period received. Promises to give which are restricted by the donor to a specific purpose which has not been met as of the balance sheet date, are shown as increases in net assets with donor restrictions. This revenue is reclassified to net assets without donor restrictions when the time or purpose restrictions are met. Contributions of assets other than cash are recorded at their estimated fair value.

Donated Services and Facilities: Donated services and facilities are recorded as contributions in the year received at their estimated values at date of receipt if an objective basis is available to measure such values. When measurable, donated services are recorded as contributions when those services create or enhance non-financial assets or require specialized skills provided by individuals possessing those skills and which would be typically purchased if not provided by donation.

Fair Value Measurements: Accounting standards have established a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Inputs to the valuation methodology for the three levels of the fair value hierarchy are described below:

Level 1 Unadjusted quoted prices for identical assets or liabilities in active markets that the company has the ability to access. Level2 Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in inactive markets; Inputs other than quoted prices that are observable for the asset or liability; Inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level3 Unobservable and significant to the fair value measurement.

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

- 10 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements (Continued) June 30, 2019

1. Summary of Significant Accounting Policies (Continued)

Comparative Information: The combined financial statements include certain prior year summarized comparative information in total but not by net asset class. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Organizations' combined financial statements for the year ended June 30, 2018, from which the summarized information was derived.

Reclassifications: Certain reclassifications have been made to the June 30, 2018, summarized comparative information to be in conformity with the current year presentation. These reclassifications had no effect on the previously reported change in net assets or ending net assets.

2. Pledges Receivable

Pledges receivable, net, consisted of the following at June 30:

2019 2018

Due within one year $ 973 ,477 $ 815 ,498 Due in one to five years 84,200 60,000 1,057,677 875,498 Less allowance for doubtful accounts 184,925 165,626 Less discount to present value 4 915 2.200

Pledges receivable, net $ 867,837 $ 707,672

The present value discount rate was 3.0% at June 30, 2019 and 2018.

3. Investments

Fair value of investments consisted of the following at June 30:

2019 2018

UMass Foundation Endowment pooled funds (Level 3) $ 14,050 $ 13 ,813 Community Foundation Fund (Level 3) 26,314 24.964

Total investments $ 40,361 $ 38,777

Fair values for common stocks were determined by reference to quoted market prices and other relevant information generated by market transactions.

- 11 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements (Continued) June 30, 2019

3. Investments (Continued) The following schedule reconciles the fair value measurements using significant unobservable inputs (Level 3), as noted above, for the UMass Foundation Endowment pooled funds and the Community Foundation Fund for the years ended June 30:

2019 2018

Balance, beginning of year $ 38,777 $ 36,271 Unrealized gains 1,776 2,274 Interest income 619 1,035 Available for appropriation (493) (494) Administrative fees (315) (309)

Balance, end of year $ 40,364 $ 38,777

The UMass Foundation Endowment pooled funds is the Organization's permanently restricted endowment.

Return Objectives, Risk Parameters and Strategies: The Organization has an endowment managed by UMass Foundation, Inc. in a pooled investment fund. The Organization follows UMass Foundation, Inc. 's investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while assuming a moderate level of investment risk.

Spending Policy: The Organization follows UMass' spending policy related to this endowment.

4. Financing Arrangement The Organization obtained financing for the purchase of a condominium unit on Main Street in Springfield, Massachusetts, and the subsequent renovation of that unit (the project) through the establishment of two Limited Liability Companies: New England Public Radio Investment Fund LLC (the investment LLC) and MHIC NE CDE II Subsidiary 22 LLC, to obtain the necessary funding for the project and obtain New Markets Tax Credits under the Section 45D of the Internal Revenue Code. The Organization is not a member of either of these companies.

The investment LLC obtained a leverage loan from New England Public Radio Foundation, Inc. and an initial capital contribution from MHIC New Markets Western Massachusetts Fund, LLC. The investment LLC then made a capital contribution to MHIC NE CDE II Subsidiary 22 LLC, which in turn loaned NEPR Foundation Real Estate, Inc. $6,014,000.

- 12 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements (Continued) June 30, 2019

5. Note Receivable

The Organization had a note receivable for $4,246,420 at June 30, 2019 and 2018, from the investment LLC (see Note 4). The note is secured by substantially all the assets of the investment LLC. The note requires receipt of payments of interest only at 0.705% per annum through December 2020. Commencing in January 2021, the note is receivable in monthly installments ranging from $12,377 to $21 ,384, including interest at 0.705% per annum, through November 2043. The remaining balance due, if any, will be receivable in December 2043 .

6. Property and Equipment

Property and equipment consisted of the following at June 30:

2019 2018 Antenna, transmitter and other broadcast equipment $ 570,761 $ 570,761 Computer, digital broadcasting and translator equipment 3,071,418 3,092,194 Furniture and fixtures 58,923 58,923 Building and building improvements 5,593,984 5,593,984 9,295,086 9,315,862 Less accumulated depreciation 2,719,561 2,398,626

Total property and equipment $6,515,525 $6,217,236

Depreciation expense was $354,339 and $371 ,442 for the years ended June 30, 2019 and 2018, respectively.

The Organization disposed of $33,404 and $35,180 of equipment that was fully depreciated and no longer in use during the years ended June 30, 2019 and 201 8, respectively.

7. Notes Payable

The Organization has a note payable to MHIC NE CDE II Subsidiary 22 LLC for $6,014,000. The note is secured by a first priority mortgage on the property on Main Street in Springfield, Massachusetts. The note requires payments of interest only at 0.50% per annum through December 2020. There is no prepayment by the Organization allowed during this first seven-year period. A one-time principal payment of $25,000 is due in August 2020. Commencing in December 2020, the note is payable in monthly installments ranging from $12,630 to $18,648, including interest at 0.50% per annum, through December 2043 . As required by the note payable, the Organization has established a separate bank account for an asset management fee reserve. The balance in this restricted account was $49,083 and $80,083 at June 30, 2019 and 2018, respectively.

- 13 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements (Continued) June 30, 2019

7. Notes Payable (Continued) The Organization has a note payable to a bank for $607,374. The note is secured by substantially all the assets of New England Public Radio Foundation, Inc. The note requires monthly interest payments at a fixed rate of 4.50% per annum, through February 2021. The note requires annual principal payments until paid in full in an amount equal to the greater of (a) the amount of cash received from capital campaign pledges and any other fundraising events conducted by the Organization, or on behalf of the Organization during the year or (b) the amount required to reduce the principal balance of the note payable to specific maximum principal balances per the note payable agreement. As required by the note payable, the Organization has established a separate bank account for a debt reserve. The balance in this restricted account was $147,292 and $147,218 at the years ended June 30, 2019 and 2018, respectively.

The Organization has a note payable to a bank for $114,423. The note is secured by a first mortgage on the property on Main Street in Springfield, Massachusetts. The note requires monthly payments of principal and interest, at a initial rate of 5.00% per annum, through June 2025. After this date, the interest rate will be adjusted to a new fixed interest rate of 2.25% above the FHLBB rate, through June 2030.

The estimated minimum principal maturities of the notes payable are as follows:

Years ending June 30, 2019 $ 307,998 2020 198,382 2021 220,545 2022 245,184 2023 161,334 Thereafter 5,602,354

Total $6,735,797

8. Line of Credit New England Public Radio Foundation, Inc. has an unsecured commercial line-of-credit agreement with a bank. The maximum amount available under this agreement is $200,000. Interest is payable monthly at an annual rate of prime less 0.10% (5.40% at June 30, 2019). There was no outstanding balance at June 30, 2019 and 2018.

9. Operating Leases

The Organization leases certain office equipment under an operating lease that expired in July 2017 and continued on a month to month contract. Rent expense under this agreement was $2,484 for each of the years ended June 30, 2019 and 2018.

- 14 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements (Continued) June 30, 2019

9. Operating Leases (Continued)

The Organization leases studio and office space at a local public television station under a lease that expires in July 2018. Rent expense under this agreement was $12,016 and $12,994 for the years ended June 30, 2019 and 2018, respectively.

The Organization leases land under a lease that expired in August 2020. Rent expense under this agreement was $500 for each of the years ended June 30, 2019 and 2018.

The Organization leases tower space at various sites under leases that expire from 2017 to 2025. Rent expense under these agreements was $71 ,967 and $64,395 for the years ended June 30, 2019 and 2018, respectively.

Future estimated minimum annual lease payments under operating lease agreements are as follows: Year ending June 30, 2020 $ 61,776 2021 60,440 2022 36,874 2023 25 ,234 2024 17,736

Total $202,060

10. Other Commitments The Organization entered into a condominium agreement related to a building on Main Street in Springfield, Massachusetts, that requires payments of condominium fees each year based upon an agreed-upon percentage of utilities, maintenance, and other expenses incurred by the condominium management company. The condominium fees were $19,446 and $18,986 for the years ended June 30, 2019 and 2018, respectively.

The Organization had an agreement with a management company to perform various building management and administrative services related to the building on Main Street in Springfield, Massachusetts, that ended on December 31 , 2017. The agreement required monthly payments of $1 ,400, including $1 ,000 in on-air trade. The management fees were $4,800 for the year ended June 30, 2018.

- 15 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements (Continued) June 30, 2019

11. Net Assets With Donor Restrictions

Net assets with donor restrictions consisted of the following at June 30:

2019 2018

Capital campaign $ 79,210 $110,553 Other projects 375,051 242,963 Endowment pooled funds 14.050 13.813

Total temporarily restricted net assets $~68,311 $361,322

12. Net Assets Released from Restriction Net assets released from restriction for the capital campaign and other projects were $462,713 and $434,422, for the years ended June 30, 2019 and 2018, respectively.

13 . Related Party Transactions

WFCR-FM owed $164,982 and $233,799 to UMass at June 30, 2019 and 2018, respectively. Interest expense, at 2.0% per year, on the amount owed to UMass was $9,754 and $7,995 for the years ended June 30, 2019 and 2018, respectively.

WFCR-FM received in-kind services and facilities from UMass totaling $684,078 and $721 ,164 for the years ended June 30, 2019 and 2018, respectively.

14. Compensated Absences and Employee Benefits

The liability for accrued compensated absences of $257,159 and $256,206 as of June 30, 2019 and 2018, respectively, consisted of accruals for sick and vacation pay relating to employees on WFCR-FM' s payroll.

The University of Massachusetts, through the Commonwealth of Massachusetts, provides group insurance, workers' compensation and pension benefits. The total amount expended for these benefits was approximately $658,361 and $579,974 for the years ended June 30, 2019 and 2018, respectively.

The Commonwealth of Massachusetts is statutorily responsible for the pension benefit of WFCR-FM employees who participate in the State Employees' Retirement system (the "Retirement System"). The Retirement System, a single employer defined benefit public employee retirement system, is administered by the Commonwealth of Massachusetts and covers all benefited employees. The annuity portion of the Retirement System is funded by employees who contribute a percentage of their regular compensation.

The total payroll covered by these programs at WFCR-FM amounted to approximately $1,859,956 and $1 ,651 ,554 for the years ended June 30, 2019 and 2018, respectively.

- 16 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements (Continued) June 30, 2019

15. Retirement Plan The Commonwealth of Massachusetts (the "State") provides pension benefits to employees of WFCR-FM on the same basis as to employees of the State. The WFCR-FM Pension Plan requires employees to contribute 7%, 8%, or 9% of gross annual salary, depending on date of hire. Participants are eligible to apply for benefits based on length of service, age, and average salary. Separate reporting of pension funding information is not available for WFCR-FM, but individual account information is available to participants. For collectively bargained, multi-employer pension plans, contributions are made in accordance with negotiated labor contracts and generally are based upon the number of hours worked. With the passage of the Multi-Employer Pension Plan Amendments Act of 1980 ("the Act"), the Organization may, under certain circumstances, become subject to liabilities in excess of contributions made under collective bargaining agreements. Generally, these liabilities are contingent upon the termination, withdrawal, or partial withdrawal from the plans. The Organization has not taken any action to terminate, withdraw, or partially withdraw from these plans which would result in a material liability. Under the Act, liabilities would be based upon the Organization's proportional share of each plan's unfunded vested benefits. No estimate of this amount is available at this time.

A defined contribution retirement plan is provided by the Organization through Capital Bank and Trust Company and American Funds. As of the year ended June 30, 2013 , the Organization makes an annual contribution based on 2% of commissions paid to sales representative employees. The Organization did not make contributions to the plan prior to that. Employee contributions are subject to limits imposed by Section 414(n) and Section 403(b) of the Internal Revenue Code. The Organization expensed $3 ,730 and $4,463 during the years ended June 30, 2019 and 2018, respectively.

16. Contingency As a component unit of UMass, the Organization's labor is subject to collective bargaining agreements. Once agreements have been finalized between the Board of Trustees of UMass, the Professional Staff Union/MT AINEA and the University Staff Association/MT A/NEA, the agreements must be ratified and approved by the legislature and governor of the Commonwealth of Massachusetts. The contract negotiations may be a lengthy process, and at times employees have worked for a period of years before agreements were finalized. The Organization does not accrue for potential compensation costs, generally based on an estimated cost-of-living adjustment (COLA), until a definitive agreement is ratified, approved and the actual retroactive compensation is determined.

- 17 - WFCR-FM AND NEW ENGLAND PUBLIC RADIO FOUNDATION, INC. Notes to the Combined Financial Statements (Continued) June 30, 2019

17. Available Resources and Liquidity

Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the statement of financial position date, comprise the following at June 30:

Cash and cash equivalents $ 115,725 $226,532 Accounts receivable 650 700 Accounts receivable - underwriting, net 148,628 97,005 Pledges receivable, net - current portion 804,552 659,070 Less donor restricted cash (43 ,360) (104,130) Less donor restricted pledges receivable (321,302) (175,820) Total financials assets available for general expenditures within one year $704,893 $703,357

The Organization also has a $200,000 line of credit from a bank that is available, if needed, to meet short-term liquidity needs.

18. Subsequent Events

New England Public Radio Foundation, Inc. became New England Public Media, Inc. in July 2019. New England Public Media, Inc. is a robust new multi-media organization created in collaboration with WGBY Public Television.

The Organization evaluated subsequent events after the combined statement of financial position date of June 30, 2019, through November 19, 2019, the date on which the combined financial statements were available to be issued, and concluded that no other additional disclosures were required.

- 18 -