public media connect audited financial statements...

PUBLIC MEDIA CONNECT

AUDITED FINANCIAL STATEMENTS

JUNE 30, 2013


TABLE OF CONTENTS

Schedule No. Page

Independent Auditors’ Report .............................................................................. 1-2

Consolidated Statement of Financial Position........................................................ 3

Consolidated Statement of Activities and Changes in Net Assets ....................... 4-5

Consolidated Statement of Cash Flows .................................................................. 6

Notes to Consolidated Financial Statements ...................................................... 7-24

Independent Auditors’ Report on Additional Information .................................... 25

1 Consolidated Statement of Broadcasting and Telecommunication Service Expense................................................................. 26-27

2 Consolidated Statement of Fundraising Expense ............................................... 28-29

3 Consolidated Statement of Administrative Expense ............................................. 30

2000 West Dorothy Lane ■ Dayton, Ohio 45439 ■ TEL 937.298.0201 FAX 937.298.5758 ■ www.battellecpas.com

INDEPENDENT AUDITORS’ REPORT

Board of TrusteesPublic Media ConnectDayton, Ohio

Report on the Financial Statements

We have audited the accompanying consolidated financial statements of Public Media Connect which comprise the consolidated statement of financial position as of June 30, 2013 and 2012, and the related consolidated statements of activities and changes in net assets and cash flows for the years then ended and the related notes to the financial statements.

Management’s Responsibility for the 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.

Auditors’ 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 of 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 reasonable basis for our audit opinion.

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Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Public Media Connect as of June 30, 2013 and 2012, and the change 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.

November 7, 2013

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A S S E T S 2013 2012

Cash and cash equivalents 320,643$ 90,087$ Accounts receivable 308,517 381,899 Contribution receivable, net of allowance 2,583,376 55,777 Pledges receivable 25,565 48,383 Prepaid expense 158,683 59,247 Investments 3,734,192 2,714,569 Beneficial interest in perpetual trust 788,549 714,797 Prepaid rents 477,787 540,837 Land 105,728 105,728 Building and equipment, net 6,525,047 6,777,097

Total assets 15,028,087$ 11,488,421$

LIABILITIES Lines of credit 902,652$ 652,982$ Accounts payable, trade 205,075 216,133 Accrued expenses 383,127 358,853 Deferred support and revenue 154,627 228,113 Capital lease obligations 106,607 129,334 Accrued pension benefit obligation 1,493,219 2,283,738 Total 3,245,307 3,869,153

NET ASSETS Unrestricted 8,246,929 6,723,985 Temporarily restricted 2,658,582 91,766 Permanently restricted 877,269 803,517 Total net assets 11,782,780 7,619,268

Total liabilities and net assets 15,028,087$ 11,488,421$

LIABILITIES AND NET ASSETS

June 30


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The accompanying notes are an integral part of the consolidated financial statements.3

YEAR ENDED JUNE 30, 2013

(WITH COMPARATIVE TOTALS FOR 2012)

Temporarily PermanentlyUnrestricted Restricted Restricted 2013 2012

SUPPORT Corporation for Public Broadcasting: Community Service Grant and Interconnect reimbursement 1,791,021$ -$ -$ 1,791,021$ 1,912,442$ Operations Grant 20,000 20,000 - U.S. Department of Commerce - - 482,191 Public Broadcasting Service 479,070 479,070 - eTech Ohio: Operating Subsidy 301,193 301,193 301,193 Educational Subsidy 421,402 421,402 421,402 In-kind donations (contra in expense) 1,616,434 1,616,434 1,661,158 Montgomery County 41,986 41,986 41,986 Total support 4,671,106 - - 4,671,106 4,820,372

REVENUE Memberships and other contributions 4,361,042 2,609,316 6,970,358 3,210,748 Donated services (contra in expense) 233,062 233,062 131,015 Acquired program sponsorship and underwriting 452,109 452,109 364,757 Uncollectable program sponsorship and underwriting - - (101,352) Auction and special events 683,717 683,717 680,893 Contract production services 505,571 505,571 487,130 Educational Broadcast Service 404,496 404,496 495,125 Educational services 580,138 580,138 538,907 Facility rental 317,150 317,150 231,646 Tower rental 25,313 25,313 29,773 Interest and dividends 76,816 76,816 72,270 Unrealized loss on investments (5,147) (5,147) (52,236) Realized gain (loss) on investments 182,590 182,590 (603) Promotion and miscellaneous 133,292 133,292 51,246 Loss on disposal of equipment - - (6,375) Change in value of beneficial interest in perpetual trust 73,752 73,752 (83,929) Total revenue 7,950,149 2,609,316 73,752 10,633,217 6,049,015

Net assets released from restrictions 42,500 (42,500) - - -

Total support and revenue 12,663,755 2,566,816 73,752 15,304,323 10,869,387

EXPENSE Broadcasting and telecommunication service 8,488,324 8,488,324 8,583,881 Fundraising 1,544,826 1,544,826 1,514,293 Administrative 1,768,331 1,768,331 1,685,911 Total expense 11,801,481 11,801,481 11,784,085

Changes in net assets before pension adjustment 862,274 2,566,816 73,752 3,502,842 (914,698)

CHANGE IN PENSION BENEFIT OBLIGATION 660,670 660,670 (1,405,986)

CHANGE IN NET ASSETS 1,522,944 2,566,816 73,752 4,163,512 (2,320,684)

Net assets, beginning of year 6,723,985 91,766 803,517 7,619,268 9,939,952

NET ASSETS, END OF YEAR 8,246,929$ 2,658,582$ 877,269$ 11,782,780$ 7,619,268$


CONSOLIDATED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS

TOTAL

The accompanying notes are an integral part of the consolidated financial statements.

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Temporarily PermanentlyUnrestricted Restricted Restricted TOTAL

SUPPORT Corporation for Public Broadcasting: Community Service Grant and Interconnect reimbursement 1,912,442$ -$ -$ 1,912,442$ U.S. Department of Commerce 482,191 482,191 eTech Ohio: Operating Subsidy 301,193 301,193 Educational Subsidy 421,402 421,402 In-kind donations (contra in expense) 1,661,158 1,661,158 Montgomery County 41,986 41,986 Total support 4,820,372 - - 4,820,372

REVENUE Memberships and other contributions 3,143,982 66,766 3,210,748 Donated services (contra in expense) 131,015 131,015 Acquired program sponsorship and underwriting 364,757 364,757 Uncollectable program sponsorship and underwriting (101,352) (101,352) Auction and special events 680,893 680,893 Contract production services 487,130 487,130 Educational Broadcast Service 495,125 495,125 Educational services 538,907 538,907 Facility rental 231,646 231,646 Tower rental 29,773 29,773 Interest and dividends 72,270 72,270 Unrealized loss on investments (52,236) (52,236) Realized loss on investments (603) (603) Promotion and miscellaneous 51,246 51,246 Program distribution - - Loss on disposal of equipment (6,375) (6,375) Change in value of beneficial interest in perpetual trust (83,929) (83,929) Total revenue 6,167,530 (34,586) (83,929) 6,049,015

Net assets released from restrictions 216,844 (216,844) -

Total support and revenue 11,204,746 (251,430) (83,929) 10,869,387

EXPENSE Broadcasting and telecommunication service 8,583,881 8,583,881 Fundraising 1,514,293 1,514,293

Administrative 1,685,911 1,685,911 Total expense 11,784,085 11,784,085

Changes in net assets before pension adjustment (579,339) (251,430) (83,929) (914,698)

CHANGE IN PENSION BENEFIT OBLIGATION (1,405,986) (1,405,986)

CHANGE IN NET ASSETS (1,985,325) (251,430) (83,929) (2,320,684)

Net assets, beginning of year 8,709,310 343,196 887,446 9,939,952

NET ASSETS, END OF YEAR 6,723,985$ 91,766$ 803,517$ 7,619,268$


CONSOLIDATED STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS


The accompanying notes are an integral part of the consolidated financial statements.

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2013 2012CASH FLOWS FROM OPERATING ACTIVITIES Change in net assets 4,163,512$ (2,320,684)$ Adjustments to reconcile change in net assets

to net cash provided by (used in) operating activities: Depreciation expense 1,141,024 1,278,694

Uncollectable program sponsorship and underwriting - 101,352 Proceeds from capital grants (479,070) (482,191)

Noncash donation of tower space 20,000 20,000 Loss on disposal of equipment - 6,375 Realized (gain) loss on investments (182,590) 603 Unrealized loss on investments 5,147 52,236 (Gain) loss on beneficial interest in perpetual trust (73,752) 83,929 Increase (decrease) in cash arising from changes in assets and liabilities: Accounts and pledges receivable 96,200 191,055 Contributions receivable (2,527,599) 78,588 Prepaid expense and rents (56,386) 62,356 Accounts payable and accrued compensation 13,216 (223,127) Deferred support and revenue (73,486) (217,077) Accrued pension benefit obligation (790,519) 1,255,181 Net cash provided by (used in) operating activities 1,255,697 (112,710)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of equipment (888,974) (642,959) Purchase of investments (1,993,183) (185,242) Proceeds from sale of investments 1,151,002 215,379 Net cash used in investing activities (1,731,155) (612,822)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from capital grants 479,070 482,191

Net change in long-term capital lease (22,727) -

Net borrowings on lines of credit 249,671 134,234

Net cash provided by financing activities 706,014 616,425

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 230,556 (109,107)

Cash and cash equivalents at beginning of year 90,087 199,194

CASH AND CASH EQUIVALENTS AT END OF YEAR 320,643$ 90,087$

Purchase of property and equipment through capital lease obligations 86,223$ Receivables and deferred income recorded through direct financing of capital lease 6,552 Receivables recorded through direct financing of capital lease 43,111

Interest paid 31,110$ 31,417$

Year Ended June 30


CONSOLIDATED STATEMENT OF CASH FLOWS

SUPPLEMENTAL CASH FLOWS INFORMATION

NON-CASH FINANCING ACTIVITY

The accompanying notes are an integral part of the consolidated financial statements.6


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2013

NOTE 1 - DESCRIPTION OF THE ORGANIZATION

Public Media Connect (the Organization) is a tax-exempt corporation under Section 501(c)(3) of the Internal Revenue Code. The Organization was formed when the Boards of Trustees of Greater Dayton Public Television, Inc. (Think TV) and Greater Cincinnati Television Educational Foundation (CET) formed a regional, nonprofit public broadcasting and media holding company. The Organization owns and operates noncommercial broadcasting stations in the State of Ohio, specifically WPTD Channel 16 inDayton, WPTO Channel 14 in Oxford, WCET Channel 48 in Cincinnati, and other telecommunication facilities. The Organization receives support primarily from the viewing public and private and government grants.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting polices followed in the preparation of the consolidated financial statements of the Organization are described below:

Basis of Accounting

The Organization utilizes the accrual basis of accounting.

Basis of Presentation

The accompanying consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP) in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC).

The Organization’s resources are classified for accounting and reporting purposes into three net asset categories according to externally (donor) imposed restrictions. Additionally, unconditional promises to give (pledges) are recorded as receivables and revenues and classified among net asset categories according to donor-imposed restrictions. A description of the net asset categories follows:

Unrestricted Net Assets: Unrestricted net assets are resources that are available to support the Organization’s operations.

Temporarily Restricted Net Assets: Temporarily restricted net assets are contributions and grants for which donor-imposed restrictions have not been met. When donor restrictions expire, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.

Permanently Restricted Net Assets: Permanently restricted net assets have been restricted by donors to be maintained in perpetuity. Generally, the donors of these assets stipulate at the time the gift is made thatall or part of the income earned on related investments can be utilized to support the Organization’s operations.

The Organization also conforms in all material respects to the reporting principles required by the Corporation for Public Broadcasting as promulgated in its publication, Financial Reporting Guidelines.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Principles of Consolidation

The consolidated financial statements include the accounts of Public Media Connect (the media holding company) and the entities which are members of the media holding company (Think TV and CET). These entities are controlled by a single Board of Trustees. Public Media Connect has consolidated the financial statements of Think TV and CET for purposes of financial statement presentation. These entities will be referred to as the “Organization” in subsequent note disclosures. All inter-entity account balances have been eliminated in the consolidation.

Donor-Imposed Restrictions

All contributions are considered to be available for unrestricted use unless specifically restricted by the donor. If a restriction is fulfilled in the same time period in which a restricted contribution is received, the Organization classifies the support as unrestricted.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires Management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

For financial statement purposes, the Organization considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Concentration of Credit and Other Risk

Financial instruments that potentially subject the Organization to concentrations of credit risk consist principally of deposits in banks that sometimes exceed federally insured limits and accounts receivable. The Organization manages the risk regarding deposits by using high credit quality financial institutions.

Concentrations of credit risk with respect to accounts receivable are limited due to the large number of grantor organizations and their dispersion across different industries.

The Organization’s investments are subject to the normal risks associated with financial markets. The Organization manages the risk with regard to investments by adhering to an investment policy which requires professional investment management, as well as other standards and practices.

The Corporation for Public Broadcasting (CPB) is a major source of funding for the Organization. The Organization received $1,811,021 and $1,912,442 in 2013 and 2012, respectively, from CPB, representing approximately 12% and 18% of total revenue and support for 2013 and 2012, respectively.

Accounts Receivable

Accounts receivable are uncollateralized grantor obligations due under normal trade terms. Accounts receivable are stated at the amount billed to the grantor. Payments of accounts receivable are allocated to the specific invoices identified on the grantor remittance advice or, if unspecified, are applied to the earliest unpaid invoices.

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Accounts Receivable (Continued)

Management individually reviews each grantor based on an assessment of current credit worthiness and estimates the portion, if any, of the balance that will not be collected. Based upon that assessment, the carrying amount of accounts receivable is reduced by a valuation allowance that reflects Management’s best estimate of the amounts that will not be collected, resulting in a charge to bad debt expense.

Accounts receivable are written off when the Organization determines they are uncollectible. Recoveries of accounts receivable previously written off are recorded when collected. At June 30, 2013 the provision for uncollectible accounts was $50,000 (none at June 30, 2012).

Contributions Receivable

Contributions receivable represent unconditional pledges from donors and bequests from estates and trusts to contribute cash or other assets to the Organization. Also included in contributions receivable are distributions to be received from charitable lead trusts. Contributions receivable are recognized when received at the net present value of the amounts expected to be collected. Amounts expected to be collected after one year are recorded at the present value of their estimated future cash flows. Amortization of the discount for present value is included in contributions revenue.

Membership Pledges Receivable

Membership pledges receivable represent unconditional promises to give and are receivable in less than one year. A provision is made for estimates of pledges that may not be collected. The provision for uncollectible pledges totaled $42,400 and $16,000 at June 30, 2013 and 2012, respectively.

Pledges Receivable

Pledges receivable represent unconditional promises from donors to contribute cash or other assets to the Organization. At June 30, 2013, the provision for uncollectible pledges was $17,000 (none at June 30, 2012).

Investment Valuation and Income Recognition

Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.Purchases and sales of securities are recorded on a trade-date basis. Net unrealized gain or loss includes the Organization’s gains and losses on investments bought and sold as well as held during the year. Capital gain distributions are included in dividend and interest income. The Organization’s investments are subject to the normal risks associated with financial markets.

Beneficial Interest in Perpetual Trust

The beneficial interest in perpetual trust is a resource held and administered, at the direction of the resource provider, by an outside trustee for the benefit of the Organization. These accounts are reported at estimated fair value of the assets in the trust with changes in value included in the statement of activities. These resources consist of permanently restricted (perpetual trust) net assets. Under the terms of the perpetual trust, the Organization has the irrevocable right to receive the income earned on the trust assets in perpetuity, but never receives the assets held in trust.

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Building and Equipment

Building and equipment are recorded at cost or, in the case of donated assets, at their estimated fair value at date of receipt. Depreciation is computed by the straight-line method over the estimated useful lives ofthe respective assets. Impairment of equipment is recognized if equipment becomes obsolete.

Broadcast Licenses

The Organization has three broadcast license agreements with the Federal Communications Commission. The license agreements provide the Organization the right to broadcast televised programs in the Dayton and Cincinnati, Ohio, area. Consistent with industry practices the intangible assets associated with the license agreements are not recorded on the consolidated statement of financial position.

Production Revenue and Expense

The Organization uses the completed-contract method of accounting for production revenue and related costs. Concurrent with the initial broadcast or distribution of the programs, related production costs will be reported as operating expenses and related funding will be reported as earned revenue in the statement of activities. Production costs include charges by subcontractors plus all direct costs. Indirect and general and administrative expenses are charged to expense as incurred.

Contributions

The Organization records gifts of cash and other assets at their fair market value as of the date of contribution. Such donations are recorded as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts having donor stipulations which are satisfied in the period the gift is received are reported as unrestricted revenue and net assets.

Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how long-lived assets must be maintained, the Organization reports expirations of donor restrictions when the donated or acquired long-lived assets are placed in service.

Unconditional gifts expected to be collected within one year are reported at their net realizable value. Unconditional gifts expected to be collected in future years are reported at the present value of estimated future cash flows. The resulting discount is amortized using the level-yield method and is reported as contribution revenue. All contributions receivable are expected to be collected within one year. Conditional promises to give are recognized as revenues when the conditions on which they depend are substantially met.

Community Service Grants

The CPB is a private, nonprofit grant-making organization responsible for funding more than 1,000 television and radio stations. CPB distributes annual Community Service Grants (CSGs) to qualifying public telecommunications entities. Each CSG may be expended over one or two federal fiscal years as described in the Communications Act, 47 United States Code Annotated Section 396(k)(7), (1983) Supplement. In any event, each grant must be expended within two years of the initial grant authorization.

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Community Service Grants (Continued)

The grants are reported on the accompanying consolidated financial statements as unrestricted operating funds; however, certain guidelines must be satisfied in connection with application for and use of the grants to maintain eligibility and compliance requirements. These guidelines pertain to the use of grant funds, record keeping, audits, financial reporting, and licensee status with the Federal Communications Commission.

Government Grants

Support funded by state grants is recognized as the Organization performs the contracted services or incurs outlays eligible for reimbursement under the grant agreement. Grant activities and outlays aresubject to audit and acceptance by the granting agency and, as a result of such audit, adjustments could be required.

Donated Goods and Services

Donated goods and professional services are reported in the consolidated financial statements as revenue and expense. The value of these donations has been determined from invoices rendered by the various donors. A substantial number of volunteers have made significant contributions of time to the Organization’s policy-making, program and support functions. The value of this contributed time does not meet the criteria for recognition of donated services existing in accounting standards and, accordingly, is not reflected in the accompanying consolidated financial statements. For the year ended June 30, 2013, $1,849,496 was received in donated services and in-kind contributions ($1,792,173 for the year ended June 30, 2012).

Income Taxes

The Organization is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and a similar provision of state law. The Organization is not a private foundation as defined in Section 509(a) of the Internal Revenue Code. However, the Organization is subject to federal income tax on any unrelated business taxable income. Management does not believe that the Organization conducts any activities subject to taxation as unrelated business income.

Management concluded that there are no uncertain tax positions that require recognition or disclosure in the consolidated financial statements. With few exceptions, the Organization’s federal information returns are no longer subject to examination by the Internal Revenue Service for years before fiscal 2010.

Programming Rights

Costs of programming rights are expensed in the year of acquisition even though, in certain instances, these rights have a term exceeding one year.

Advertising Costs

Advertising costs are expensed when incurred and totaled $57,771 and $88,595 in fiscal 2013 and 2012, respectively.

Functional Allocation of Expenses

The costs of providing the various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. 11


Reclassification

Certain amounts in the prior year consolidated financial statements have been reclassified to conform to the current year presentation.

Subsequent Events

The Organization has determined that there were no subsequent events that would require disclosure or adjustments to the accompanying consolidated financial statements through November 7, 2013, the date the consolidated financial statements were available to be issued.

NOTE 3 - PLEDGES RECEIVABLE

Pledges that are expected to be collected within one year are recorded at net realizable value. Pledges that are expected to be collected after one year are recorded at the present value of their estimated future cash flows. Effective interest rate used in the present value calculation for 2012 was 3.90%. Amortization of the discount is included in contribution revenue. At June 30, 2013, pledges receivable totaled $25,565($48,383 at June 30, 2012). All amounts are expected to be collected within one year at June 30, 2013.

NOTE 4 - INVESTMENTS

The cost and fair value of the Organization’s investments at June 30, 2013 and 2012 are summarized as follows:

Unrealized

June 30, 2013 Cost Fair Value Gain (Loss)Money market funds 142,560$ 142,560$ -$ Fixed income securities 208,186 202,220 (5,966) Mutual funds 2,572,498 2,879,771 307,273 Equity securities 36,981 24,561 (12,420) Foundation funds 412,367 485,080 72,713 Total 3,372,592$ 3,734,192$ 361,600$

Unrealized

June 30, 2012 Cost Fair Value GainMoney market funds 76,204$ 76,204$ -$ Fixed income securities 178,846 196,327 17,481 Mutual funds 1,396,515 1,705,891 309,376 Equity securities 262,866 297,431 34,565 Foundation funds 409,177 438,716 29,539 Total 2,323,608$ 2,714,569$ 390,961$

The Dayton Foundation held $485,080 and $438,716 in trust for the Organization at June 30, 2013 and 2012, respectively, which is included in the total investment balance. Per terms of the trust agreement, the Organization can receive distributions from this trust with a two-thirds vote of the Organization’s Board of Trustees.

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NOTE 5 - BENEFICIAL INTEREST IN PERPETUAL TRUST

The Organization is the beneficiary under a perpetual trust administered by an outside party. Under the terms of the trust, the Organization has the irrevocable right to receive income earned on the trust assets in perpetuity, but never receives the assets held in trust. The estimated value of the expected future cash flows is $788,549 which represents the fair value of the trust assets at June 30, 2013 ($714,797 at June 30, 2012). The income from the trust for fiscal 2013 and 2012 was $34,316 and $49,266, respectively.

NOTE 6 - BUILDING AND EQUIPMENT

Building and equipment consisted of the following major classifications at June 30:

2013 2012

Building and improvements 7,638,014$ 7,417,531$

Tower, antenna, and transmitting equipment 7,839,985 7,676,128

Technical equipment 18,029,015 17,889,755

Transmitting equipment 3,165,552 3,059,452

Computer equipment 1,857,607 1,835,349

Furniture, fixtures and office equipment 1,164,221 1,129,744

Vehicles 88,470 101,876

Total at cost 39,782,864 39,109,835

Less accumulated depreciation (33,257,817) (32,332,738)

Total building and equipment 6,525,047$ 6,777,097$

Estimated asset lives are:

Classification Years

Building and improvements 10 - 30

Tower, antenna, and transmitting equipment 5 - 20

Technical equipment 5 - 7

Transmitting equipment 5 - 7

Computer equipment 3 - 5

Furniture, fixtures and office equipment 5 - 7

Vehicles 5

The Organization has received funds through grants from agencies of the federal government for the purpose of acquiring property and equipment. The Federal Government has a ten-year interest in assets purchased with federal funds commencing at the date of the completion of a specific project.

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NOTE 6 - BUILDING AND EQUIPMENT (CONTINUED)

The following summarizes information related to the Organization’s property and equipment subject to a Federal Government interest as of June 30, 2013:

Federal Expiration of

Think TV Cost Interest Federal Interest

Transmitting equipment 282,601$ 140,753$ 9/30/2018

Technical equipment 235,749 106,747 6/30/2020


Total 655,651$ 316,150$

CET

Transmitting equipment 527,348$ 263,674$ 12/31/2013



Total 1,373,844$ 686,922$

Depreciation expense for fiscal 2013 and 2012 totaled $1,141,024 and $1,278,694, respectively.

NOTE 7 - LINES-OF-CREDIT

The Organization has two line of credit arrangements at June 30, 2013, to provide for normal working capital requirements.

Think TV established a demand line of credit with Merrill Lynch, Bank of America Corporation during fiscal 2013. The maximum draw available of this credit facility is based on the value of the collateralized investments held at the bank which totaled $839,485 at June 30, 2013. The maximum credit available on this facility totaled $360,351. The outstanding balance as of June 30, 2013 was $249,113. Interest is charged on amounts borrowed against the line at one month LIBOR rate plus 1.5%.

Think TV had a line-of-credit in the amount of $500,000 with Fifth Third Bank. This arrangement bore interest at one month LIBOR rate plus 1.95%, was collateralized by investments held at the bank, and terminated on December 31, 2012. At June 30, 2012, the balance on the line-of-credit was $125,000.

CET has a demand line-of-credit with Merrill Lynch, Bank of America Corporation. The maximum draw available of this credit facility is based on the value of collateralized investments held at the bank which totaled $1,874,032 and $1,337,872 at June 30, 2013 and June 30, 2012, respectively. The maximum credit available on this facility totaled $1,159,267 and $818,255 at June 30, 2013 and June 30, 2012, respectively. The outstanding balance at June 30, 2013 was $653,538 ($527,982 at June 30, 2012).Interest is charged on amounts borrowed against the line at one month LIBOR rate plus 1.5%.

NOTE 8 - OPERATING LEASES

The Organization entered into a long-term operating lease with the City of Dayton in 1987 for administrative and operating facilities. Lease terms require minimum annual rental payments through June 30, 2013. The Organization has the option of extending the lease for five successive five-year terms with annual rental payments increasing with each five-year term. Minimum future rental payments under noncancellable operating leases having terms in excess of one year at June 30, 2013 are as follows: 2014- $41,580, 2015 - $41,580, 2016, $41,580, 2017 - $41,580, 2018 - $41,580.

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NOTE 8 - OPERATING LEASES (CONTINUED)

In 2003, the Organization entered into a ten-year dedicated point-to-point line arrangement with Time Warner Telecom calling for a one-time payment in the amount of $200,000. The expense associated with this lease is being recognized on a straight-line basis over the ten-year term of the lease; prepaid rent was $15,000 and $35,000 at June 30, 2013 and 2012, respectively. The Organization has the option to renew this lease for an additional ten-year term, provided 60 days’ prior notice is given to Time Warner Telecom.

In 2003, the Organization entered into a twenty-year tower lease arrangement with Raycom National, Inc. calling for a one-time payment of $861,000. The expense associated with this lease is being recognized on a straight-line basis over the twenty-year term of the lease; prepaid tower rent was $462,788 and $505,837 at June 30, 2013 and 2012. The Organization has the option to renew this lease for two successive ten-year terms, provided 90 days’ prior notice is given to the lessor.

Total rent expense for fiscal 2013 was $172,990 ($165,245 in 2012).

NOTE 9 - CAPITAL LEASES

At June 30, 2013, the Organization was obligated under a capital lease for telephone equipment. The lease agreement was for equipment with a total cost of $129,191. The Organization entered into subleases with Cincinnati Public Radio for one third of the equipment, as described in Note 13. Therefore, equipment with a cost of $85,631 has been capitalized. Depreciation of assets under outstanding capital lease agreements began in fiscal 2013 and totaled $17,216.

The future minimum lease payments required under the capital leases with the present value of the net minimum lease payments as of June 30, 2013, are as follows:

2014 29,799$

2015 29,799$

2016 29,799$

2017 28,783

Net minimum lease payments 118,180

Less amount representing interest (11,573)

Present value of net minimum lease payments 106,607$

NOTE 10 - TEMPORARILY RESTRICTED NET ASSETS

Temporarily restricted net assets are available for the following purposes at June 30:

2013 2012

For periods after June 30 2,658,582$ 91,766$

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NOTE 11 - PERMANENTLY RESTRICTED NET ASSETS

Permanently restricted net assets as of June 30 are restricted as follows:2013 2012

Investment in perpetuity, the income of which is expendable

to support:

General operating activities 788,549$ 714,797$ Programming activities 88,720 88,720

877,269$ 803,517$

NOTE 12 - RETIREMENT PLANS

Substantially all employees of Think TV are covered by a defined contribution 403(b) plan. There were no contributions to the plan in fiscal 2013 and 2012.

CET has a defined contribution retirement plan under the provisions of Internal Revenue Code Section 403(b) covering substantially all employees. Contributions to the plan are made in accordance with a specified formula. No contributions were made to the plan in fiscal 2013 and 2012.

CET has a noncontributory defined benefit pension plan covering all employees who meet certain eligibility requirements. Benefits are based upon years of service and the employee’s compensation. CET’s funding policy is to make the minimum annual contribution that is required by applicable regulations, plus any amounts the Organization determines to be appropriate from time to time.

The measurement dates used for pension obligations were June 30, 2013 and 2012.

The following table presents the changes in benefit obligations and changes in plan assets for the yearsended June 30:

2013 2012Changes in benefit obligation:

Benefit obligation, beginning of year 5,981,150$ 4,813,830$

Interest cost 234,601 259,384

Actuarial (gain)/loss (278,016) 1,113,284

Benefits paid (203,538) (205,348) Benefit obligation, end of year 5,734,197$ 5,981,150$

Changes in plan assets:

Fair value of plan assets, beginning of year 3,697,412$ 3,785,273$

Actual return on plan assets 507,918 (21,281)

Employer contributions 239,186 138,768

Benefits paid (203,538) (205,348) Fair value of plan assets, end of year 4,240,978$ 3,697,412$

The funded status and amounts recognized in the Organization’s consolidated statement of financial position at June 30 were as follows:

2013 2012Projected benefit obligation 5,734,197$ 5,981,150$ Fair value of plan assets 4,240,978 3,697,412

Accrued pension benefit obligation 1,493,219$ 2,283,738$

Accumulated benefit obligation is $5,981,150 at June 30, 2013 ($5,734,197 at June 30, 2012).

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NOTE 12 - RETIREMENT PLANS (CONTINUED)

Significant assumptions used in accounting for the pension plan as of June 30 were as follows:

2013 2012Discount rate for benefit obligation 4.50% 4.00%Discount rate for net periodic benefit cost 4.00% 5.50%Expected return on plan assets 7.50% 7.50%Rate of compensation increase N/A N/A

The components of net periodic benefit cost recognized in the consolidated statement of activities for the years ended June 30 were as follows:

2013 2012Interest cost 234,601$ 259,384$ Expected return on plan assets (279,932) (282,152) Amortization of (gain)/loss 154,668 10,731

109,337$ (12,037)$

The Organization expects to contribute $147,656 to the pension plan over the year ending June 30, 2014.

The following benefit payments are expected to be paid:

2014 234,191$

2015 245,905

2016 263,532

2017 284,425

2018 321,898

2019-2023 1,910,709

The Plan has unrecognized loss subject to amortization totaling $1,338,735 and $1,999,405 as of June 30, 2013 and 2012, respectively. The net losses which will be amortized as a component of net periodic pension cost during the next fiscal year total $90,143.

Plan Assets

The Organization has investment guidelines for plan assets. The overall objective of the guidelines is to ensure the plan assets provide capital growth over an extended period of time, while also considering market risks and ensuring that the portfolio income and liquidity are appropriate to meet the plan benefit payments and other expenses. The plan investments are required to be diversified by asset class and within each asset class, in order to ensure that no single investment will have a disproportionate impact on the total portfolio. The plan asset allocation is reviewed each year with current market assumptions to ensure the asset mix will achieve the long-term goals of the plan. The plans target allocation is 70% equity securities and 30% debt securities, with an acceptable range of 35% to 85% for equity securities and a range of 15% to 65% for debt securities.

The Organization’s pension plan asset allocation at fair value at June 30 by asset category was as follows:

2013 2012Equity securities 68% 71%Debt securities 32% 29%

100% 100%

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NOTE 12 - RETIREMENT PLANS (CONTINUED)

The following table sets forth by level within the fair value hierarchy, the Plan’s assets at fair value as of June:

June 30, 2013 Total Level 1 Level 2 Level 3Money market funds 105,252$ -$ 105,252$ -$

Fixed income

Bond funds 887,381 887,381 - - Other funds 126,612 126,612 - -

Total fixed income 1,013,993 1,013,993 - -

Equities

Blend 729,571 729,571 - - Growth 1,345,513 1,345,513 - - Value 829,837 829,837 - - Real estate 216,812 216,812 - -

Total equities 3,121,733 3,121,733 - -

Total plan assets 4,240,978$ 4,135,726$ 105,252$ -$

Fair Value Measurements Using

June 30, 2012 Total Level 1 Level 2 Level 3Money market funds 109,838$ -$ 109,838$ -$

Fixed income

Bond funds 750,095 750,095 - -

Equities

Blend 1,163,520 1,163,520 - - Growth 1,095,116 1,095,116 - - Value 375,164 375,164 - - Real estate 203,679 203,679 - -

Total equities 2,837,479 2,837,479 - -

Total plan assets 3,697,412$ 3,587,574$ 109,838$ -$


The following is a description of the valuation methodologies used for the assets measured at fair value in the above table.

Money market funds: Valued at the net asset value of underlying assets.

Equities/fixed income funds: Valued at the closing price reported on the active market on which the individual securities are traded.

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NOTE 13 - RENTAL INCOME

The Organization leases office space to tenants under noncancelable operating lease agreements that expire in October 2019. Rental income for the lease included in the statement of activities for the yearsended June 30, 2013 and 2012 was $317,150 and $231,646, respectively.

The Organization sub-leases office equipment to Cincinnati Public Radio under capital lease agreementsthat expire in July 2018. As a result of these agreements future minimum lease payments receivables totaling $49,664 and deferred revenue totaling, $6,553 were recorded at June 30, 2012. Rental payments begin in fiscal 2013.

Future annual minimum lease receipts at June 30, 2013 were as follows: 2014 - $244,851; 2015 -$244,851; 2016 - $244,851; 2017 - $244,010; 2018 - $234,804 and thereafter - $234,804.

NOTE 14 - FAIR VALUE MEASUREMENTS

The Organization has determined the fair value of certain assets through application of accounting guidance that establishes a framework for measuring fair values.

The accounting standard defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. This standard also requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. In that regard, a fair value hierarchy has been established forvaluation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity has the ability to access as of the measurement date.

Level 2 Significant other observable inputs other than the Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

Level 3 Significant unobservable inputs that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at June 30, 2013 and 2012.

Money market funds: Valued at the net asset value of underlying assets.

Equities/fixed income funds/mutual funds: Valued at the closing price reported on the active market on which the individual securities are traded.

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NOTE 14 - FAIR VALUE MEASUREMENTS (CONTINUED)

Foundation fund: Valued at the fair value of the underlying funds multiplied by the Organization’s proportionate interest. The underlying funds are primarily assets which can be valued using observable inputs.

Beneficial interest in perpetual trust: The fair value of the Organization’s beneficial interest in the perpetual trust is calculated utilizing the fair value of the underlying funds multiplied by the Organization’s proportionate ownership interest of the right to receive the income from the fund in perpetuity. The underlying funds are primarily assets which can be valued using observable inputs.

Assets and Liabilities Measured on a Recurring Basis

The following table summarizes assets measured at fair value on a recurring basis as of June 30, 2013and 2012, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value.

June 30, 2013 Total Level 1 Level 2 Level 3Investments:

Money market funds 142,560$ -$ 142,560$ -$

Fixed income

Bond funds 117,809 117,809 - - Government 34,883 34,883 - - Municipal 47,908 47,908 - - Other 1,620 1,620 - -

Total fixed income 202,220 202,220 - -

Mutual funds

Balanced 828,693 828,693 - - Growth 761,099 761,099 - - Value 653,138 653,138 - - Bond 397,799 397,799 - - Income 178,732 178,732 - - Other 60,310 60,310 - -

Total mutual funds 2,879,771 2,879,771 - -

Equities

Consumer goods 1,619 1,619 - - Financial 20,216 20,216 - - Technology 2,726 2,726 - -

Total equities 24,561 24,561 - -

Foundation fund 485,080 - 485,080 -

Total investments 3,734,192 3,106,552 627,640 - Beneficial interest in

perpetual trust 788,549 - 788,549 - Total 4,522,741$ 3,106,552$ 1,416,189$ -$

(Continued)

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NOTE 14 - FAIR VALUE MEASUREMENTS (CONTINUED)

June 30, 2012 Total Level 1 Level 2 Level 3Investments:

Money market funds 76,204$ -$ 76,204$ -$

Fixed income

Bond funds 14,405 14,405 Corporate 100,541 100,541 Government 81,381 81,381

Total fixed income 196,327 196,327 - -

Mutual funds

Balanced 449,898 449,898 Growth 490,436 490,436 Value 372,185 372,185 Bond 304,515 304,515 Income 82,409 82,409 Other 6,448 6,448

Total mutual funds 1,705,891 1,705,891 - -

Equities

Consumer goods 30,651 30,651 Energy 33,006 33,006 Financial 39,097 39,097 Health care 26,807 26,807 Industrial goods 35,934 35,934 Materials 21,238 21,238 Services 29,360 29,360 Technology 7,722 7,722 Telecommunication 73,616 73,616

Total equities 297,431 297,431 - -

Foundation fund 438,716 438,716

Total investments 2,714,569 2,199,649 514,920 - Beneficial interest in

perpetual trust 714,797 714,797 Total 3,429,366$ 2,199,649$ 1,229,717$ -$


NOTE 15 - ENDOWMENT

The Organization’s endowment consists of various donor-restricted endowment funds established for a variety of purposes. As required by generally accepted accounting principles, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions.

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NOTE 15 - ENDOWMENT (CONTINUED)

The following is a summary of the net asset composition by type of fund at June 30:

Temporarily PermanentlyJune 30, 2013 Unrestricted Restricted Restricted Total

Donor restricted endowment

funds $ 88,720 $ 88,720

Temporarily PermanentlyJune 30, 2012 Unrestricted Restricted Restricted Total

Donor restricted endowment

funds $ 88,720 $ 88,720

Changes in the endowment net assets for the years ended June 30, 2013 and 2012 are as follows:

Temporarily Permanently2013 Unrestricted Restricted Restricted Total

Endowment net assets, beginningof year -$ -$ 88,720$ 88,720$

Interest and dividends 1,862 - 1,862 Unrealized gain 7,812 - 7,812 Realized gain 7 - 7 Appropriation of endowment assets

for expenditure (9,681) - (9,681)

Endowment net assets, end ofyear -$ -$ 88,720 88,720$

Beneficial interest in endowment funds 788,549 788,549$

Total 877,269$

Temporarily Permanently2012 Unrestricted Restricted Restricted Total

Endowment net assets, beginningof year -$ -$ 88,720$ 88,720$

Interest and dividends 1,493 - 1,493 Unrealized loss (659) - (659) Realized loss (155) - (155) Appropriation of endowment assets

for expenditure (679) - (679)

Endowment net assets, end ofyear -$ -$ 88,720 88,720$

Beneficial interest in endowment funds 714,797 714,797$

Total 803,517$

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NOTE 15 - ENDOWMENT (CONTINUED)

Interpretation of Relevant Law

The Board of Trustees of the of the Organization has interpreted the Uniform Prudent Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment fund absent explicit donor stipulations to the contrary. As a result of this interpretation, the Organization classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, and (b) the original value of subsequent gifts to the permanent endowment. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as unrestricted net assets.

Investment Policy

Endowment assets include those assets of donor-restricted funds that the organization must hold in perpetuity. Under this policy, the primary objective is to provide for preservation of capital with an emphasis on long-term growth without undue exposure to risk. The return objective is to achieve a total return, net of fees, in excess of spending and inflation greater than the consumer price index plus 4%. To satisfy its long-term rate-of-return objectives, the Organization relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The Organization targets a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints.

Spending Policy

The Organization’s current spending policy is to transfer all investment return into the unrestricted investments as stipulated by the donors at the time of the gift. The Board of Trustees approves the use of unrestricted investments assets to meet operating needs.

NOTE 16 - RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Standards

Classification of the Sale Proceeds of Donated Financial Assets in the Statement of Cash Flows

In October 2012, the FASB issued guidance which requires a not-for-profit entity to classify cash receipts from the sale of donated financial assets consistently with cash donations received in the statement of cash flows if those cash receipts were from the sale of donated financial assets that upon receipt were directed without any not-for-profit entity-imposed limitations for sale and were converted nearly immediately into cash. Accordingly, the cash receipts from the sale of those financial assets should be classified as cash inflows from operating activities, unless the donor restricted the use of the contributed resources to long-term purposes, in which case those cash receipts should be classified as cash flows from financing activities. Otherwise, cash receipts from the sale of donated financial assets should be classified as cash flows from investing activities. This guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after June 15, 2013. The adoption of this guidance will change how the Organization currently classifies cash receipts from the sale of certain donated financial assets.

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NOTE 16 - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

Services Received from Personnel of an Affiliate

In April 2013, the FASB issued guidance which requires a not-for-profit entity to recognize contributed services at fair value if employees of separately governed affiliated entities regularly perform services (in other than an advisory capacity) for and under the direction of the donee if they (1) create or enhance nonfinancial assets or (2) require specialized skills, are provided by individuals possessing those skills, and typically would need to be purchased if not provided by donation. This amendment only applies to not-for-profit entities that receive services from personnel of an affiliate that directly benefit the recipient not-for-profit entity and for which the affiliate does not charge the recipient. Those services should be measured at the cost recognized by the affiliate for the personnel providing those services. However, if measuring a service received at cost will significantly overstate or understate the value of the service received, the recipient not-for-profit entity may elect to recognize that service at either (1) the cost recognized by the affiliate or (2) the fair value of that service. This guidance is effective prospectively for fiscal years beginning after June 15, 2014, and interim and annual periods thereafter. The Organization is currently evaluating how this guidance will impact the financial statements.

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2000 West Dorothy Lane ■ Dayton, Ohio 45439 ■ TEL 937.298.0201 FAX 937.298.5758 ■ www.battellecpas.com

INDEPENDENT AUDITORS’ REPORT ON THE SUPPLEMENTARY INFORMATION

Board of TrusteesPublic Media ConnectDayton, Ohio

We have audited the financial statements of Public Media Connect as of and for the years ended June 30, 2013 and 2012, and have issued our report thereon which contains an unmodified opinion on those financial statements. See page 1. Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information is presented for purposes of additional analysis and is not a required part of the 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 financial statements. The information has been subjected to the auditing procedures applied in the audits of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepared the financial statement 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 financial statements taken as a whole.

November 7, 2013

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Schedule No. 1

Technical Programming Ed. Services Production Promotions Total

Salaries 746,249$ 286,352$ 246,676$ 658,367$ 205,192$ 2,142,836$ Benefits 134,870 52,003 52,737 133,782 46,173 419,565 Outside labor - - - 28,578 - 28,578

Supplies 4,434 3,602 39,820 14,669 1,207 63,732 Printing 23 - 11,712 58 57,135 68,928 Promotional incentive - - 2,438 - - 2,438 Advertising - - - 2,348 57,777 60,125

Postage and shipping 3,644 1,274 5,731 481 31,571 42,701 Travel and training 13,680 8,103 22,496 13,736 3,319 61,334 Receptions 132 - 1,576 1,504 356 3,568 Repair and maintenance 163,643 9,483 796 2,565 - 176,487

Utilities 257,935 - 198 1,983 - 260,116 Rent 44,404 - 3,900 3,513 - 51,817 Memberships 448 507 355 2,792 105 4,207 Consulting fees 794 73,505 5,747 8,591 24,142 112,779

Production fees - - 20,050 39,896 - 59,946 Educational fees - - 296,322 - - 296,322 Insurance - 7,876 - - - 7,876 Program acquisitions - 1,529,997 - - - 1,529,997

Program membership dues/interconnect - 251,190 - 13,214 - 264,404 In-kind services 720,705 - 895,729 - 153,639 1,770,073 Commissions - - - - 385 385 Depreciation 914,750 5,986 8,820 129,832 418 1,059,806

Total 3,005,711$ 2,229,878$ 1,615,103$ 1,056,213$ 581,419$ 8,488,324$



CONSOLIDATED STATEMENT OF BROADCASTING AND TELECOMMUNICATION SERVICE EXPENSE

See Independent Auditors' Report on the Supplementary Information.26

Schedule No. 1

Technical Programming Ed. Services Production Promotions Total

Salaries 723,858$ 332,605$ 263,059$ 624,472$ 204,213$ 2,148,207$ Benefits 125,707 52,218 50,810 132,080 36,131 396,946 Recruitment - - - 34,959 - 34,959 Outside labor -

Supplies 342 7,224 30,271 9,817 634 48,288 Printing 82 - 11,648 58 56,827 68,615 Promotional incentive - - 1,515 - - 1,515 Advertising - - - - 85,235 85,235

Postage and shipping 1,114 1,426 6,629 173 26,568 35,910 Travel and training 9,670 6,277 17,886 9,157 2,891 45,881 Receptions - - 2,789 825 117 3,731 Repair and maintenance 155,189 8,707 582 2,856 - 167,334

Utilities 254,035 - 195 2,108 - 256,338 Rent 43,974 - 7,075 185 - 51,234 Memberships 157 562 437 2,620 105 3,881 Consulting fees 316 67,033 25,820 4,791 20,586 118,546

Production fees - - 14,210 20,637 - 34,847 Educational fees - - 262,944 - - 262,944 Insurance - 16,910 - - - 16,910 Program acquisitions - 1,609,873 - - - 1,609,873

Program membership dues/interconnect - 266,828 - 14,916 - 281,744 In-kind services 720,705 - 940,453 - 28,550 1,689,708 Depreciation 1,108,653 6,332 3,109 102,488 653 1,221,235

Total 3,143,802$ 2,375,995$ 1,639,432$ 962,142$ 462,510$ 8,583,881$



CONSOLIDATED STATEMENT OF BROADCASTING AND TELECOMMUNICATION SERVICE EXPENSE


Schedule No. 2

Member Auction andMarketing Services Special Events Total

Salaries 96,408$ 301,285$ 211,916$ 609,609$ Benefits 29,541 70,499 42,863 142,903 Outside labor 208 - 2,779 2,987 Supplies 474 2,843 12,651 15,968

Printing services 117 22,937 7,222 30,276 Advertising - 81,236 - 81,236 Promotional incentives 5 116,185 7,731 123,921 Postage and shipping 80 79,970 6,106 86,156

Travel and training 1,235 11,442 2,738 15,415 Receptions 129 9,934 39,475 49,538 Repair and maintenance - 20,164 4,724 24,888 Facility and equipment rent 140 - 30,900 31,040

Utilities - 761 776 1,537 Memberships - 538 83 621 Commissions - 111,474 - 111,474

Direct mail fees - 128,690 - 128,690 Consulting fees - (2,088) 9,820 7,732 Production fees - - - - Purchased items - - 4,076 4,076

Recruitment - - - - In-kind services - 67,539 - 67,539 Depreciation - 3,502 1,456 4,958 Board of Trustee/Staff - 1,167 3,095 4,262

Total 128,337$ 1,028,078$ 388,411$ 1,544,826$


CONSOLIDATED STATEMENT OF FUNDRAISING EXPENSE



Schedule No. 2

Member Auction andMarketing Services Special Events Total

Salaries 98,824$ 296,234$ 225,082$ 620,140$ Benefits 16,969 58,914 31,088 106,971 Outside labor - - 2,968 2,968 Supplies 1,057 2,895 7,626 11,578

Printing services 97 18,339 8,528 26,964 Advertising - 3,360 - 3,360 Promotional incentives 14 158,277 8,013 166,304 Postage and shipping 132 78,163 4,913 83,208

Travel and training 1,697 9,014 1,931 12,642 Receptions 122 5,110 36,058 41,290 Repair and maintenance - 19,880 5,593 25,473 Facility and equipment rent - - 28,865 28,865

Utilities - 1,581 2,310 3,891 Memberships - 537 110 647 Commissions - 124,827 4,693 129,520

Direct mail fees - 131,360 - 131,360 Consulting fees - 10,329 7,616 17,945 Production fees - 1,756 - 1,756 Purchased items - - 3,612 3,612

In-kind services - 84,797 - 84,797 Depreciation 42 4,912 1,809 6,763 Board of Trustee/Staff - 93 4,146 4,239

Total 118,954$ 1,010,378$ 384,961$ 1,514,293$


CONSOLIDATED STATEMENT OF FUNDRAISING EXPENSE



Schedule No. 3

2013 2012

Salaries 590,349$ 575,230$ Benefits 97,753 82,135 Outside labor 7,067 - Supplies 14,607 14,528 Printing services 846 1,614

Promotional incentives 37 55 Postage and shipping (835) 4,565 Travel, training and mileage 8,623 6,862 Repair and maintenance 99,842 114,192 Utilities 308,876 353,370

Office and equipment rent 90,163 85,146 Memberships 21,429 10,405 Professional fees 149,273 136,301 Insurance 90,860 88,670 Recruitment 4,570 -

Bank fees 93,266 93,329 Board of Trustees 13,291 12,131 Bad debt expense 50,000 5,872 Depreciation 76,260 50,696

Interest expense 31,110 31,417 Miscellaneous 8,219 4,505 In-kind services 11,884 14,718 Receptions 841 170

Total administrative expense 1,768,331$ 1,685,911$

Year Ended June 30


CONSOLIDATED STATEMENT OF ADMINISTRATIVE EXPENSE


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