Red River Radio Network June 30,2008 Management's Discussion and Analysis

KDAQ-FM, KLSA-FM, KBSA-FM, AND KLDN-FM RADIO STATIONS LOUISIANA STATE UNIVERSITY IN SHREVEPORT STATE OF LOUISIANA JUNE 30, 2008 Jnder provisions of state law, this report is a public document. Acopy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office pf the garish clerk of court. Release Date KDAOFM, KLSA-FM. KBSA-FM, AND KLDN-FM RADIO STATIONS LOUISIANA STATE UNIVERSITY IN SHREVEPORT STATE OF LOUISIANA TABLE OF CONTENTS Page Management's Discussion and Analysis (Unaudited) i-iii AUDITED FINANCIAL STATEMENTS Statement Independent Auditor's Report 1 Statement of Financial Position A 2 Statement of Activities B 3-4 Statement of Cash Flows C 5 Notes to the Financial Statements 6-12 OTHER REPORTS Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 13-14 Schedule of Findings and Questioned Costs 15 Schedule of Prior Year Findings 16 Management's Corrective Action Plan 17 RED RIVER RADIO NETWORK JUNE 30,2008 MANAGEMENT'S DISCUSSION AND ANALYSIS Our discussion and analysis of the Red River Radio Network's (the Network) financial performance provides an overview of the Network's financial activities for the fiscal year ended June 30, 2008. Please read it in conjunction with the Network's financial statements. Financial Highlights The Network's net assets increased by $107,071 or 57% during the year ended June 30, 2008. Most of the increase is attributed to the conversion of the stations to High Definition (HD) broadcasting. Using the Annual Report This annual report consists of Management's Discussion and Analysis, the basic financial statements, and notes to the financial statements. Management's Discussion and Analysis provides a narrative of the Network's financial performance and activities for the year ended June 30, 2008. The basic financial statements provide readers with a broad view of the Network's finances, in a manner similar to a private-sector business. The notes provide additional information that is essential to a full understanding of the data provided in the basic financial statements. The basic financial statements consist of three statements: • The Statement of Financial Position presents information on all of the Network's assets and liabilities, with the difference between the two reported as net assets. Over time, increases and decreases hi net assets may serve as a useful indicator of whether the financial position of the Network is improving or deteriorating. • The Statement of Activities presents information showing how the Network's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Certain revenues and expenses are reported in this statement that will result in cash flows in future periods. • The Statement of Cash Flows presents information on how the Network's cash changed during the most recent fiscal year. It shows the sources and uses of cash. Financial Analysis of the Network as a Whole A summary of net assets is presented below: Table 1 Net Assets 2008 2007 % Change Current and other assets (56,482) 89,529 (163) Capital assets, net of depreciation 400,901 201,242 99 Total assets 344,419 290,771 18 2008 2007 % Change Current liabilities 438 49,667 (99) Noncurrent liabilities 48,886 53,080 _£§) Total liabilities 49,324 102,747 (52) Invested in capital assets 315,925 201,242 57 Unrestricted net assets (20,830) (13.218) 58 Total net assets 295.095 188.024 Invested in capital assets represent the Network's long-term investment in capital assets, net of accumulated depreciation, and not available for current operations. A summary of changes in net assets is presented below: Table 2 Changes in Net Assets 2008 2007 % Change Operating revenues (memberships, underwriting, lease agreements, noncapital grants) 725,848 972,452 (25) Total revenues 725,848 972,452 (25) Operating expenses Depreciation 88,230 40,248 100 Other 1,019,678 1,024,781 Total expenses 1,107,908 1,065,029 4 Capital contributions 489,131 241,490 100 Change in net assets 107.071 148.913 28 Capital Assets For the year ending June 30, 2008, the Network received funding from the Corporation for Public Broadcasting and from private foundations to convert its broadcasting equipment into high definition (HD) broadcasting. The Network invested $287,889 in the project, less accumulated depreciation of $88,230 resulting in a net of $400,901 as shown in the Statement of Financial Position. Noncurrent Liabilities The Network's noncurrent liabilities consist of accrued compensated absences for annual and sick leave payable. These liabilities decreased by $4,194 during the fiscal year, from $53,080 at the beginning of the year to $48,886 at the end of the year. Other Currently Known Facts, Decisions, or Conditions Over the course of the next year, the Network will finish the digital infrastructure improvements that were started during the past year. This will include the completion of the digital conversion for KLDN, the last station to receive this transmitter upgrade and the stabilization of our multicasting signals (also part of the HD system). The Network will start its capital campaign for the next stage of infrastructure improvement, which is the replacement of aging studio equipment and the ultimate construction of new studio facilities. This is expected to be a 2 year project. Contacting the Network's Financial Management This financial report is designed to provide a general overview of the Network's accountability for the money it receives. If you have questions about this report or need additional financial information, please contact the Red River Radio Network of Louisiana State University in Shreveport, One University Place, Shreveport, Louisiana 71115. in AUDITED FINANCIAL STATEMENTS ^.•53 "I'l-'XAS STKrri PAKTXI-KS ROY E. PIJKSTV.VOOD. CPA J 15'1'H Fl.OOK Si i;NCi-K BKKNARIJ, JR., CPA A. D. JOHNSON, JR., CVA HEARD H.Q. GAI-IAGAK, JR., CPA, AFC RON W. STEWART, CPA, APC Si-MU'Vi-poKT, LA 711U1 G[-;UALD W. HI-DGCOCK, JR., CCA, APC BENJAMIN C. Woons, CPA/ABV. OVA MCELROY 318 -i29-1525 TIM B. Nii-:i-Si-:N, CPA, APC ALICE V. FRAZIF.R, ci'A 318 429-2070 FAX JOHN \V. DF.AN, ci'A, APC MARK D. EU:>RFDGH, CPA OK Cou,\'SKL &; VESTAL POST OFFICI-: Box 1607 GlI.BI-RT R. SHANUiY, JH., CPA LLP ROBI-KT L. DI;AN, CPA SlIKIiVI-POUT, LA STEI-HF.N \V. CRAIG, CPA C. CODY WHITE, JR.. CPA, APC 71165-1607 J. PKTKK GAI;FNHY, CPA, APC December 8, 2008 Louisiana State University in Shreveport State of Louisiana Shreveport, Louisiana Independent Auditor's Report We have audited the accompanying.stateinent of financial position, statement of activities, and statement of cash flows of Radio Stations KDAQ-FM, KLSA-FM, KBSA-FM, and KLDN-FM, Louisiana State University in Shreveport, public telecommunications entities operated by Louisiana State University in Shreveport, as of and for the year ended June 30, 2008 (with summarized total for 2007). These financial statements are the responsibility of management of the radio stations. Our responsibility is to express an opinion 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 and 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 1, the financial statements of Radio Stations KDAQ-FM, KLSA-FM, KBSA-FM, and KLDN-FM, Louisiana State University in Shreveport, are intended to present the financial position, changes in net assets, and cash flows on only that portion of the funds of Louisiana State University in Shreveport that is attributable to the transactions of the radio stations. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Radio Stations KDAQ-FM, KLSA-FM, KBSA-FM, and KLDN-FM, Louisiana State University in Shreveport, at June 30, 2008, and the changes in net assets and the cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. The management's discussion and analysis on Pages i-iii is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. In accordance with Government Auditing Standards, we have also issued a report dated December 8, 2008, on our consideration of the Radio Stations KDAQ-FM, KLSA-FM, KBSA-FM, and KLDN-FM, Louisiana State University in Shreveport's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters.

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