National Public Radio, Inc
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National Public Radio, Inc. Consolidated Financial Statements, Supplemental Schedules, and Independent Auditors’ Report As of and for the years ended September 30, 2019 and 2018 The report accompanying these financial statements was issued by BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of BDO International Limited, a UK company limited by guarantee. National Public Radio, Inc. Consolidated Financial Statements, Supplemental Schedules, and Independent Auditors’ Report As of and for the years ended September 30, 2019 and 2018 National Public Radio, Inc. Contents Independent Auditors' Report ................................................................................................ 1-2 Consolidated Financial Statements Consolidated Balance Sheets ................................................................................................. 3 Consolidated Statements of Activities ..................................................................................... 4 Consolidated Statements of Functional Expenses .................................................................. 5 Consolidated Statements of Cash Flows ................................................................................ 6 Notes to Consolidated Financial Statements ..................................................................... 7-38 Supplemental Schedules National Public Radio, Inc. (Parent Company Only) Balance Sheets ............................................................................................................... 39 Statements of Activities .............................................................................................. 40-41 NPR Foundation Balance Sheets ............................................................................................................... 42 Statements of Activities ................................................................................................... 43 Tel: 301-354-2500 12505 Park Potomac Avenue Fax: 301-354-2501 Suite 700 www.bdo.com Potomac, MD 20854 Independent Auditors' Report To the Board of Directors National Public Radio, Inc. We have audited the accompanying consolidated financial statements of National Public Radio, Inc., which comprise the consolidated balance sheets as of September 30, 2019 and 2018, and the related consolidated statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the consolidated financial statements. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated 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 consolidated 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 these consolidated financial statements based on our audits. We conducted our audits 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 consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated 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 consolidated 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 consolidated 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 consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of National Public Radio, Inc. as of September 30, 2019 and 2018, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. BDO USA, LLP, a Delaware liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. 1 Other Matters Adoption of New Accounting Pronouncements As discussed in Note 2(Q) to the consolidated financial statements, National Public Radio, Inc. changed its method for revenue recognition in 2019 as a result of the adoption of the amendments to the Financial Accounting Standards Board Accounting Standards Codification resulting from Accounting Standards Update 2014-09, Revenue from Contracts with Customers, effective October 1, 2018. National Public Radio, Inc. also changed the presentation and related disclosures of net assets in 2019 and 2018 as a result of the adoption of the amendments to the Financial Accounting Standards Board Accounting Standards Codification resulting from Accounting Standards Update 2016-14, Presentation of Financial Statements of Not-for-Profit Entities, effective September 30, 2019. Our opinion is not modified with respect to these matters. Supplementary Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The supplemental balance sheets and statements of activities for National Public Radio, Inc. (Parent Company Only) and NPR Foundation are presented for purposes of additional analysis and are not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated 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 consolidated financial statements as a whole. December 20, 2019 2 Financial Statements and Footnotes National Public Radio, Inc. Consolidated Balance Sheets September 30, 2019 2018 Assets Cash and cash equivalents $ 23,349,432 $ 17,533,322 Restricted cash 3,943,100 4,037,336 Accounts receivable, net 35,986,581 41,075,598 Pledges receivable, net 10,170,175 14,642,604 Investments 434,500,447 420,205,695 Property and equipment, net 206,120,011 211,024,330 Prepaid expenses and other assets 6,692,977 5,137,619 Investment in Podcast Media LLC 2,010,819 483,333 Goodwill 911,421 1,822,832 Total assets $ 723,684,963 $ 715,962,669 Liabilities and Net Assets Liabilities Accounts payable and other liabilities $ 44,323,492 $ 36,543,871 Deferred revenue 25,895,132 22,168,479 Accrued interest payable 3,503,840 3,589,470 Bonds payable 166,762,911 171,257,959 Total liabilities 240,485,375 233,559,779 Commitments and contingencies Net assets Net assets without donor restrictions: Undesignated 57,385,082 56,273,787 Board-designated 88,121,177 85,195,906 Noncontrolling interest 1,361,450 1,652,209 Total net assets without donor restrictions 146,867,709 143,121,902 Net assets with donor restrictions 336,331,879 339,280,988 Total net assets 483,199,588 482,402,890 Total liabilities and net assets $ 723,684,963 $ 715,962,669 See accompanying notes to consolidated financial statements. 3 National Public Radio, Inc. Consolidated Statements of Activities Years ended September 30, 2019 2018 Changes in net assets without donor restrictions Revenues, gains, and other support Revenue from contracts with customers: Station dues, programming and digital fees $ 89,020,136 $ 85,474,802 Corporate sponsorships 111,271,829 97,071,058 Public Radio Satellite System contract 8,033,762 5,798,637 Satellite interconnection and distribution 8,609,794 9,576,404 Commissions 4,596,082 6,009,382 Other 9,304,092 8,177,792 Total revenue from contracts with customers 230,835,695 212,108,075 Contributions 23,140,957 18,708,499 Return on investments, net 4,028,679 2,808,052 Donated goods and services 3,042,690 2,765,658 Miscellaneous 912,021 1,190,275 Change in investment in subsidiary (573,180) — Change in noncontrolling interest 136,759 (343,799) Net assets released from donor restrictions 22,016,301