The accompanying financial statements and report are intended for the original recipient. They must be presented in their entirety and may not be modified in any manner. C:\Documents and Settings\ksmolens\My Documents\Kathy\Disclaimer for Financial Statement PDF.doc YELLOWSTONE PUBLIC RADIO/ KEMC-FM (A Public Radio Entity) Operated by the Montana State University-Billings FINANCIAL REPORT June 30, 2015 C O N T E N T S PAGE INDEPENDENT AUDITOR’S REPORT ..................................................................... 1 through 3 MANAGEMENT’S DISCUSSION AND ANALYSIS ................................................. 4 through 8 FINANCIAL STATEMENTS Statements of Net Position .............................................................................................. 9 and 10 Statements of Revenues, Expenses, and Change in Net Position ................................. 11 and 12 Statements of Cash Flows ............................................................................................. 13 and 14 Notes to Financial Statements ............................................................................... 15 through 46 REQUIRED SUPPLEMENTARY INFORMATION Schedules of Proportionate Share of the Net Pension Liability ................................................47 Schedules of Contributions ......................................................................................................48 Notes to Required Supplementary Information – TRS .............................................................49 Schedule of Funding Progress for Other Post Retirement Benefits Plan ..................................50 SUPPLEMENTARY INFORMATION Reconciliation of Financial Statement Income and Expense to the Corporation for Public Broadcasting (CPB) Report ................................................................51 ANDERSON ZURMUEHLEN & CO., P.C. • CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS MEMBER: AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS INDEPENDENT AUDITOR’S REPORT To the Board of Directors www.azworld.com Yellowstone Public Radio/KEMC-FM WEB: (A Public Radio Entity) • Operated by Montana State University-Billings Billings, Montana BILLINGS, MONTANA 59104-0435 MONTANA BILLINGS, • 406.245.6056 We have audited the accompanying financial statements of the business type activities and FAX: • discretely presented component unit of Yellowstone Public Radio/KEMC-FM (A Public Radio Entity) operated by Montana State University-Billings (the Station) as of and for the P.O. BOX 20435 • year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the Station’s basic financial statements as listed in the table of FLOOR 406.245.5136 contents. th TEL: TEL: 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 402 NORTH BROADWAY,4 material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions 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 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 opinions. - 1 - ANDERSON ZURMUEHLEN & CO., P.C CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and the discretely presented component unit of Yellowstone Public Radio/KEMC-FM as of June 30, 2015, and the respective changes in its financial position and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1, the financial statements of the Station are intended to present the financial position and the changes in financial position and cash flows, where applicable, of only that portion of Montana State University-Billings that is attributable to the transactions of the Station. They do not purport to and do not present fairly the financial position of Montana State University-Billings or the Montana University System as of June 30, 2015, and the changes in its financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to that matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, Schedule of Funding Progress for Other Post- retirement Benefits Plan, Schedule of Proportionate Share of the Net Pension Liability, and the Schedule of Contributions on pages 4-8 and 49-52, respectively, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of the financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise Yellowstone Public Radio/KEMC-FM’s basic financial statements. The supplementary schedule on page 53 is presented for purposes of additional analysis and is not a required part of the financial statements. - 2 - ANDERSON ZURMUEHLEN & CO., P.C CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS The supplementary schedule is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. Prior-Year Comparative Information We have previously audited Yellowstone Public Radio/KEMC-FM’s June 30, 2014, financial statements, and we expressed an unmodified opinion in our report dated January 12, 2015. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2014, is consistent, in all material respects, with the audited financial statements from which it has been derived. Billings, Montana January 11, 2016 - 3 - YELLOWSTONE PUBLIC RADIO/KEMC-FM (A PUBLIC RADIO ENTITY) OPERATED BY MONTANA STATE UNIVERSITY-BILLINGS MANAGEMENT’S DISCUSSION AND ANALYSIS (CONTINUED) Years Ended June 30, 2015 and 2014 Yellowstone Public Radio is operated by Montana State University-Billings, a component unit of the State of Montana. Friends of Public Radio (Friends) is an affiliate that raises funds to provide financial and other support to Yellowstone Public Radio. The discussion and analysis that follows provides an overview