WAMU-FM (A noncommercial educational FM station owned and operated by American University) Financial Statements For the year ended June 30, 2020 And report of independent auditors Report of Independent Auditors To the Board of Trustees of American University: We have audited the accompanying financial statements of WAMU-FM (the “Station”), which comprise the statement of financial position as of June 30, 2020, and the related statements of activities and of cash flows for the year then ended. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of the 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 material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on the 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 our 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, we consider internal control relevant to the Station'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 Station'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. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WAMU-FM as of June 30, 2020, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. December 18, 202o PricewaterhouseCoopers LLP, 1800 Tysons Boulevard, McLean, VA 22102-4261 T: (703) 918-3000, F: (703) 918 3100, www.pwc.com/us WAMU-FM (A noncommercial educational FM station owned and operated by American University) Statement of Financial Position June 30, 2020___________________________________________________________________________ Assets Cash held on deposit by American University$ 5,865,672 Accounts receivable, net 2,193,340 Contributions receivable, net 174,454 Prepaid expenses 907,027 Investments 1,256,613 Station and studio improvements, and equipment , net 27,302,248 Total assets$ 37,699,354 Liabilities and Net Assets Liabilities: Accounts payable$ 1,573,406 Deferred revenue 277,787 Loan from AU 3,808,333 Lease Obligation 13,252,274 Total liabilities 18,911,800 Net Assets: Without donor restrictions 18,064,839 With donor restrictions 722,715 Total net assets 18,787,554 Total liabilities and net assets$ 37,699,354 The accompanying notes are an integral part of these financial statements. 3 WAMU-FM (A noncommercial educational FM station owned and operated by American University) Statement of Activities Year ended June 30, 2020_________________________________________________________________ Without With donor donor re strictions restrictions Total Operating revenues and support Contributions$ 17,472,946 $ 123,272 $ 17,596,218 Corporate underwriting 12,952,433 - 12,952,433 Corporation for Public Broadcasting grants 1,661,066 - 1,661,066 Program grants 456,094 - 456,094 National public radio licensing fees 1,906,619 - 1,906,619 Facilities and other income 617,352 - 617,352 Donated services from American University 5,314,160 - 5,314,160 Donated goods and services 153,655 - 153,655 Endowment investment return 38,489 - 38,489 Net Asset Release 1,777,409 (1,777,409) - Total operating revenues and support 42,350,223 (1,654,137) 40,696,086 Operating expenses Program services Programming and production 19,279,567 - 19,279,567 Broadcasting 5,106,920 - 5,106,920 Public information and promotion 2,001,734 - 2,001,734 Total program services 26,388,221 - 26,388,221 Supporting services Management and general 5,679,274 - 5,679,274 Fund-raising and membership development 8,931,758 - 8,931,758 Total supporting services 14,611,032 - 14,611,032 Total operating expenses 40,999,253 - 40,999,253 Net operating activities 1,350,970 (1,654,137) (303,167) Nonoperating items Other nonoperating sources 263,515 (266,607) (3,092) Investment return, net of endowment spending gains (58,247) (1,858) (60,105) Total nonoperating activities 205,268 (268,465) (63,197) Change in net assets 1,556,238 (1,922,602) (366,364) Net assets at beginning of year 16,508,601 2,645,317 19,153,918 Net assets at end of year$ 18,064,839 $ 722,715 $ 18,787,554 The accompanying notes are an integral part of these financial statements. 4 WAMU-FM (A noncommercial educational FM station owned and operated by American University) Statements of Cash Flows Year ended June 30, 2020_________________________________________________________________ Cash flows from operating activities Decrease in net assets$ (366,364) Adjustments to reconcile increase in net assets to net cash provided by operating activities: Depreciation, amortization and accretion 736,296 Allowance for Uncollectible Accounts 59,244 Changes in cash held on deposit with American University (1,820,046) Net realized and unrealized capital loss 76,680 Amoritization of capital lease (72,967) Changes in assets and liabilities Decrease in accounts receivable 2,859,981 Increase in contributions receivable (127,223) Decrease in prepaid expenses 203,614 Increase in accounts payable 1,223,611 Increase in deferred revenue 103,152 Net cash provided by operating activities 2,875,978 Cash flows from investing activities Purchases of investments (407,480) Purchases of property, plant, and equipment (1,918,498) Net cash used in investing activities (2,325,978) Cash flows from financing activities Repayment of Debt (550,000) Net cash used in financing activities (550,000) Net (decrease) increase in cash and cash equivalents - Cash and cash equivalents at beginning of year - Cash and cash equivalents at end of year$ - Supplemental disclosure of cash flow information Cash paid during the year for interest 2,034,248 Accrued payment for property, plant & equipment 614,582 The accompanying notes are an integral part of these financial statements. 5 WAMU-FM (A noncommercial educational FM station owned and operated by American University) Notes to Financial Statements June 30, 2020__________________________________________________________________________ 1. Organization WAMU 88.5 FM (the Station or WAMU) is a 24-hour, 50,000-watt public radio station, licensed to American University (the University) since 1961. During the year ended June 30, 2020, the Station served 772,200 listeners in Virginia, Maryland, and the District of Columbia with news and talk programming. WAMU is dependent for its continued operations on the financial support of the University. 2. Summary of Significant Accounting Policies Fiscal Year Change On March 1, 2019 the Board of Trustees elected to change the University’s fiscal year end from April 30th to June 30th to achieve better comparability with peer universities and better align our operations with the federal financial aid year end. These financial statements comprise the first twelve-month fiscal year after the change. Basis of Presentation The financial statements of WAMU have been reported on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Classification of Net Assets Net assets, revenues, gains, and losses are classified based on the existence or absence of donor- imposed restrictions. Accordingly, net assets of the Station and changes therein are classified and reported as follows: Without donor restrictions – Net assets not subject to donor-imposed stipulations. This classification also includes net assets earmarked for board designated endowments. With donor restrictions – Net assets subject to donor-imposed stipulations that either expire by passage of time, can be fulfilled by actions of the Station pursuant to those stipulations or are subject to donor-imposed stipulations that must be maintained permanently by the Station. Revenues are reported as increases in net assets without donor restrictions unless restricted by time or purpose. Expenses are reported as decreases in unrestricted net assets. Contributions are reported as increases in the appropriate category of net assets, except that contributions which impose restrictions that are met in the same year they are received are included in unrestricted revenues. Contributions are classified as unrestricted if their usage is not limited to specific activities of the