USC Radio Combined Financial Statements for KUSC-FM, KDSC-FM, KDB-FM, KPSC-FM, KESC-FM, KDFC-FM, KOSC-FM and KXSC-FM June 30, 2015 and 2014
Total Page:16
File Type:pdf, Size:1020Kb
USC Radio Combined Financial Statements For KUSC-FM, KDSC-FM, KDB-FM, KPSC-FM, KESC-FM, KDFC-FM, KOSC-FM and KXSC-FM June 30, 2015 and 2014 USC Radio Index to Combined Financial Statements June 30, 2015 and 2014 Page (s) Independent Auditor’s Report ..................................................................................................................... 1 Combined Financial Statements Combined Statements of Financial Position ............................................................................................... 2 Combined Statements of Activities and Changes in Net Assets ................................................................ 3 Combined Statements of Cash Flows ......................................................................................................... 4 Notes to Combined Financial Statements ............................................................................................. 5-14 INDEPENDENT AUDITOR’S REPORT To the Board of Trustees of the University of Southern California We have audited the accompanying combined financial statements of the KUSC-FM, KDSC-FM, KDB-FM, KPSC-FM, KESC- FM, KDFC-FM, KOSC-FM and KXSC-FM radio stations operated by the University of Southern California (“USC Radio”), which comprise the combined statements of financial position as of June 30, 2015 and 2014, and the related combined statements of activities and changes in net assets and cash flows for the years then ended. Management's Responsibility for the Combined Financial Statements Management is responsible for the preparation and fair presentation of the 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. Auditor's Responsibility Our responsibility is to express an opinion on the combined financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to the financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 combined financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the combined financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the USC Radio preparation and fair presentation of the combined 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 USC Radio’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 combined 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 combined financial statements referred to above present fairly, in all material respects, the financial position of the KUSC-FM, KDSC-FM, KDB-FM, KPSC-FM, KESC-FM, KDFC-FM, KOSC-FM and KXSC-FM radio stations operated by the University of Southern California as of June 30, 2015 and 2014, and the changes in their net assets and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters The prior year summarized comparative information has been derived from USC Radio’s 2014 financial statements, and in our report dated November 25, 2014, we expressed an unqualified opinion on those financial statements. USC Radio is a department of the University of Southern California. As described in Note 2, due to the nature and significance of the transactions between USC Radio and the University of Southern California, the financial position, changes in net assets and cash flows may not be indicative of the results which would have been attained if USC Radio had operated independently of the University of Southern California. November 24, 2015 PricewaterhouseCoopers LLP, 601 South Figueroa Street, Los Angeles, CA 90017 T: (213) 356 6000, F: (813) 637 4444, www.pwc.com/us USC Radio Combined Statements of Financial Position June 30, 2015 and 2014 2015 2014 Assets Cash $ 3,425,523 $ 2,815,344 Accounts receivable 83,680 187,313 Pledges receivable 735,007 930,510 Investments 4,210,478 3,236,154 Due from the University of Southern California, net 3,611,186 2,559,183 Prepaid expenses 22,943 17,539 Intangible assets 16,647,718 15,247,718 Property and equipment, net 358,191 429,827 Total assets $ 29,094,726 $ 25,423,588 Liabilities and Net Assets Liabilities Accounts payable and accrued expenses $ 384,536 $ 395,493 Deposits and deferred revenue 837,558 480,915 Note payable to University of Southern California, net 6,207,976 6,988,657 Actuarial liability for annuities payable 649,500 527,951 Total liabilities 8,079,570 8,393,016 Net assets Unrestricted 18,357,490 15,129,774 Temporarily restricted 518,846 502,827 Permanently restricted 2,138,820 1,397,971 Total net assets 21,015,156 17,030,572 Total liabilities and net assets $ 29,094,726 $ 25,423,588 The accompanying notes are an integral part of these financial statements. 2 USC Radio Combined Statement of Activities and Changes in Net Assets for the year ended June 30, 2015, with summarized comparative information for the year ended June 30, 2014 Temporarily Permanently 2015 2014 Unrestricted Restricted Restricted Total Total Revenue and Support Subscription, associate and individual contributions $ 9,787,392 $ 40,059 $ 641,552 $ 10,469,003 $ 9,801,515 Corporation and foundation contributions 2,062,692 - - 2,062,692 1,970,804 Corporation for Public Broadcasting grants 460,284 - - 460,284 276,002 Contribution from the University of Southern California 68,616 - - 68,616 59,666 Net appreciation/(depreciation) in fair value of investments (298) (51,015) - (51,313) 331,607 Present value adjustment to annuities payable 26,975 - 26,975 22,759 Other 258,245 - - 258,245 323,491 Gain on nonmonetary exchange 1,400,000 - - 1,400,000 - Net assets released from redesignation (99,297) - 99,297 - - Total revenue and support 13,937,634 16,019 740,849 14,694,502 12,785,844 Expenses Programming and production 3,353,284 - - 3,353,284 3,281,976 Broadcast operations 2,866,148 - - 2,866,148 2,807,368 Fundraising 2,886,967 - - 2,886,967 2,948,578 Underwriting and grant solicitation 691,791 - - 691,791 686,039 General and administrative 751,243 - - 751,243 760,256 Web development 160,485 - - 160,485 64,529 Total expenses 10,709,918 - - 10,709,918 10,548,746 Change in net assets before transfers and purchases 3,227,716 16,019 740,849 3,984,584 2,237,098 Net asset transfer from the University - - - - 400,000 Change in net assets 3,227,716 16,019 740,849 3,984,584 2,637,098 Net assets at beginning of year 15,129,774 502,827 1,397,971 17,030,572 14,393,474 Net assets at end of year $ 18,357,490 $ 518,846 $ 2,138,820 $ 21,015,156 $ 17,030,572 The accompanying notes are an integral part of these financial statements. 3 USC Radio Combined Statements of Cash Flows June 30, 2015 and 2014 2015 2014 Cash flows from operating activities Change in net assets $ 3,984,584 $ 2,637,098 Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation and amortization 109,315 126,079 Net depreciation (appreciation) in fair value of investments 51,313 (331,607) Actuarial adjustment to annuities payable (26,975) (22,759) Net asset transfer from the University - (400,000) Gain on nonmonetary exchange (1,400,000) - Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 103,633 (68,241) Increase in pledges receivable (629,452) (349,861) Due to the University of Southern California (1,052,003) (549,590) Increase in prepaid expenses (5,404) (7,772) (Decrease) increase in accounts payable and accrued expenses (10,957) 17,172 Increase in deposits and deferred revenue 356,643 276,567 Net cash provided by operating activities 1,480,697 1,327,086 Cash flows from investing activities Proceeds from sale of investments 61,392 28,727 Purchase of investments (1,087,029) (474,967) Purchases of property and equipment (37,679) (111,398) Net cash used in investing activities (1,063,316) (557,638) Cash flows from financing activities Increase in annuities payable due to new gifts 74,327 109,235 Contributions restricted for permanent endowment 824,955 175,350 Decrease in note payable with University of Southern California (780,681) (758,338) Investment gain on annuities payable 135,589 34,617 Payments on annuities payable (61,392) (28,727) Net cash provided (used) in financing activities 192,798 (467,863) Net change in cash 610,179 301,585 Cash at beginning of year 2,815,344 2,513,759 Cash at end of year $ 3,425,523 $ 2,815,344 The accompanying notes are an integral part of these financial statements. 4 USC Radio Notes to the Combined Financial Statements June 30, 2015 and 2014 1. General KUSC-FM, located in Los Angeles, and affiliated stations KDSC-FM, located in Thousand Oaks, KDB-FM, located in Santa Barbara, KPSC-FM, located in Palm Springs, KNDL-FM, located in Angwin, KDFC-FM, located in San Francisco and KESC-FM, located in Morro Bay (collectively referred to as “USC Radio”) are noncommercial, not-for-profit, educational radio stations which are owned and operated by the University of Southern California (the “University”).