(1) Summary of Significant Accounting Policies
(a) General
The Public Broadcasting Service (PBS), incorporated in 1969, is a private, non-profit media enterprise and a national membership organization for the nation's 347 public television stations. PBS uses the power of noncommercial television, the Internet, and other media to enrich the lives of all Americans through quality programs and services that inform, inspire, and educate. Available to 99 percent of American homes with televisions and to an increasing number of digital multimedia households, PBS serves nearly 91 million people each week.

PBS ENTERPRISES, INC., a wholly-owned for-profit subsidiary of PBS, was incorporated in December 1984. PBS ENTERPRISES, INC., was organized to pursue revenue-producing projects and services as part of an ongoing effort to increase public television's financial base. NATIONAL DATACAST, INC., was incorporated in May 1988 and is a majority-owned subsidiary of PBS ENTERPRISES, INC. Minority equity interest totaling 1.5 percent is held by three PBS member stations and is reflected as minority interest in the consolidated statements of financial position.

(b) Principles of Consolidation
The consolidated financial statements include the accounts of PBS and its wholly-owned subsidiary, PBS ENTERPRISES, INC., and PBS ENTERPRISES, INC.'s majority-owned subsidiary, NATIONAL DATACAST, INC. All intercompany balances and transactions have been eliminated in consolidation.

(c) Basis of Presentation
Net assets, revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, the net assets of PBS and changes therein are classified and reported as follows:

Unrestricted net assets - Net assets that are not subject to donor-imposed stipulations.

Temporarily restricted net assets - Net assets subject to donor-imposed stipulations that may or will be met either by actions of PBS and/or the passage of time.

Permanently restricted net assets - Net assets subject to donor-imposed stipulations that must be maintained permanently by PBS. As of June 30, 2001 and 2000, PBS did not have any permanently restricted net assets.

Revenues and gains and losses on investments are reported as increases in unrestricted net assets unless use of the related assets is limited by donor-imposed restrictions. Expenses are reported as decreases in unrestricted net assets. Expirations of temporary restrictions on net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the stipulated time period has elapsed) are reported as reclassifications between the applicable classes of net assets.

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There are five parts to the financial statements.
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1. Independent Auditors’ Report
2. Consolidated Statements of Financial Position
3. Consolidated Statements of Activities
4. Consolidated Statements of Cash Flows
5. Notes to Consolidated Financial Statements
   (6 pages, page 1 of 6 above)

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