lfr JPR IJfIIFHS,? Gonsolidated Financial Statements Jefferson Public Radio &TheJPR Foundation, lnc. For the years ending June 30, 2016 and 2015 The occompanying financial stotements represent the financial position of Jefferson Public Radio, a public telecommunications entity owned and operated by Southern Oregon University. These statements include the Jefferson Public Rodio related accounts of Southern Oregon University and the JPR related occounts of the JPR Foundation, lnc., o private tax-exempt corporation organized to support Jefferson Public Radio's public service mission. JEFFERSON PUBLIC RADIO AND JPR FOUNDATION, INC. FINANCIAL REPORT AND SUPPLEMENTARY INFORMATION FOR THE YEARS ENDED JUNE 30, 2016 AND 2OI5 This Page Intentionally Left Blank JEFFERSON PUBLIC RADIO AND JPR FOUNDATION, INC. TABLE OF CONTENTS PAGE NUMBER Independent Auditors' Report 1 Combined Basic Financial Statements: Combined Statements of Financial Position J Combined Statements of Activities 4 Combined Statements of Cash Flows 5 Notes to the Combined Basic Financial Statements 6 Supplementary Information Combining Schedule of Financial Position at June 30,2016 19 Combining Schedule of Financial Position at June 30,2015 20 Combining Schedule of Activities for year ended June 30,2016 2T Combining Schedule of Activities for year ended June 30, 2015 22 Schedule ofExpenses by Entity for year ended June 30, 2016 23 Schedule of Expenses by Entity for year ended June 30,2015 24 Combining Schedule of Activities - KSOR-FM and KNCA-FM for year ended June 30, 2016 25 Combining Schedule of Activities - KSOR-FM and KNCA-FM for year ended June 30,2015 26 This Page Intentionally Left Blank Paulv, RocrRs, ann Co., P.C. 12700 SW 72nd Ave. Tigard, OR 97223 (s03) 620-2632 (s03) 684-7 s23 F AX www.paulyro gersandcocpas. com September 27,2016 To JPR Foundation Board of Directors and Southern Oregon University Jackson County, Oregon INDEPENDENT AUDITORS' REPORT Jefferson Public Radio and JPR Foundation, Inc Jackson County, Oregon Report on the Basic Financial Statements We have audited the accompanying combined statements of financial position of Jefferson Public Radio and JPR Foundation, Inc., as of June 30,2016 and 2015, and the combined statements of activities, cash flows, and the related notes to the combined basic financial statements for the years then ended which comprise the combined basic financial statements. Management's Responsibilify for the Basic Financial Statements Management is responsible for the preparation and fair presentation of these combined basic financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of basic financial statements that are free from material misstatement, whether due to error or fraud. Auditors' Responsibility Our responsibility is to express an opinion on these combined basic 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 audits to obtain reasonable assurance about whether the combined basic financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the basic financial statements. The procedures selected depend on the auditors' judgment, including the assessment of risks of material misstatement of the basic financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation and fair presentation of the basic 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 internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting estimates made by management, as well as evaluating the overall presentation of the combined basic financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. -l - Basis for Qualified Opinion Management chose not to include the combined financial position of Jefferson Live! LLC as of June 30, 2016 and 2015 and the related activities and cash flows for the years then ended, and the related notes to the combined basic financial statements. The JPR Foundation is the sole member of Jefferson Live! LLC; therefore, consolidation is required under the generally accepted accounting principles of the United States of America' Management concluded that reporting Jefferson Live! LLC separate from activities of Jefferson Public Radio and JPR Foundation was consistent with operating agreements in place between the JPR Foundation and Southern Oregon University and provided more detailed, useful and transparent information, At June 30, 2016 and 2015 Jefferson Live! LLCs total assets were $4,430,09g and 53,202,611, total liabilities were $1,563,462 and $1,751,123, and total net assets were $2,866,636 and $1,451,488, respectively. For the years ended June 30, 2016 and 2015 total revenues were$;3,495,022 and $2,084,094, and total expenses were $2,079,874 and $2,013,31 r, respectively. Qualified Opinion In our opinion, except for the effects on the 2016 and 2015 combined basic financial statements of excluding the Jefferson Live! LLC2016 and 2015 combined basic financial statements referred to in the Basis for Qualified Opinion paragraph, the combined basic financial statements referred to above present fairly, in all material respects, the financial position of Jefferson Public Radio and JPR Foundation, Inc. as of June 30,2016 and 2015 and the activities and its cash flows for the years then ended in conformity with accounting principles generally accepted in the united States of America. Other Matters Suppl e men lary InJbrmation Our audits were conducted for the purpose of forming an opinion on the financial statements that collectively comprise the combined basic financial statements. The supplementary information, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the combined basic financial statements. The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the combined basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the combined 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 combined basic financial statements or to the combined basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information, as listed in the table of contents, is fairly stated, in all material respects, in relation to the combined basic financial statements as a whole. a47zQ7*, ROYR. ROGERS, CPA PAULY, ROGERS AND CO., P.C .) COMBINED BASIC FINANCIAL STATEMENTS This Page Intentionally Left Blank JEFFERSON PUBLIC RADIO AND JPR FOUNDATION,INC. Combined Statements of Financial Position At June 30,2016 and20l5 20r6 20t5 Assets Current Assets Cash and cash equivalents s 1,687,212 $ l, I 10,017 Pledges receivable, net l60,96g 146,532 Other receivables, net 56,740 t59,277 Related parfy receivables 460,109 460,109 Prepaid expenses t\ 1L1 27,282 Deposits 1,500 4,079 Total Current Assets 2,392,271 1,907,296 Property and Equipment Land and non-depreciable buildings 421,023 293,906 Buildings and equipment, net of accumulated depreciation r,2t6.897 1,470,742 Total Properry and Equipment 1,637,920 1,764,648 Other Assets Prepaid expenses, non-current 2,370 2,370 Long-term investments 120,725 120,564 Beneficial interest in funds held by OCF 32,929 Mt. Baldy Communications, LLC 59,450 66,617 Intangible assets, net t,7 45,004 1,735,004 Total Other Assets 1,927,549 1,957,484 Total Assets s 5,957,740 $ 5,629,429 Liabilities and Net Assets Current Liabilities Accounts payable $ 37,848 s 30,221 Accrued liabilities 131,305 125,017 Accrued vacation 70,324 65,224 Deferred income 70,s89 57,240 Lease deposits I,000 1,000 Current portion of capital lease obligations 17,116 Current portion of long-term debt 9 142 8,924 Total Current Liabilities 320,208 304,742 Long-term debt, net ofcurrent portion 22,757 32,041 Total Liabilities 342,965 336,783 Net Assets Unrestricted 5,614,775 5,259,716 Permanently restricted 32,929 Total Net Assets 5,614,775 5,292,645 Total Liabilities and Net Assets $ 5,957,740 $ s,629,428 -J- JEFFERSON PUBLIC RADIO AND JPR FOUNDATION, INC. Combined Statements of Activities For the Year Ended June 30. 2016 and 2Ol5 (Restated) (Restated) 20t6 2015 Unrestricted Temporarily Permanently Combined Combined Total Restricted Restricted Total Total Revenues, Support and Other Income Revenues and support Membership and contributions s t,262,537 S $ s r,262,537 $ l,l04,t l6 Program underwriting 672,024 672,024 654,449 Southern Oregon University General appropriation 259,"t00 259,700 24s,969 Indirect administrative support 7'17,964 777,964 753,540 Corporation