Consumer Reports Inc.

“CONSUMERS INFORMATION: CONSUMER REPORTS PUBLISHES AND DISSEMINATES INFORMATION AND ADVICE TO CONSUMERS REGARDING TOPICS SUCH AS CONSUMER GOODS, SERVICES, HEALTH AND PERSONAL FINANCE IN ORDER TO EFFECT IT'S EDUCATIONAL PURPOSE. THE NUMBER OF PAID SUBSCRIBERS FOR EACH AS OF 5/31/16 INCLUDE CONSUMER REPORTS MAGAZINE 3,728,633; CONSUMER REPORTS ON HEALTH 550,767; AND CR ONLINE 3,002,061. CONSUMER REPORTS DOES NOT ACCEPT OUTSIDE ADVERTISING IN ANY OF ITS PUBLICATIONS. IN ADDITION, CONSUMER REPORTS DISSEMINATES CONSUMER INFORMATION THROUGH OTHER PRINT, RADIO, TELEVISION, ELECTRONIC PUBLISHING AND INTERACTIVE MEDIA. PRODUCT INFORMATION: CONSUMER REPORTS CONDUCTS INDEPENDENT AND IMPARTIAL TESTS AND ANALYSES ON A WIDE RANGE OF CONSUMER PRODUCTS AND SERVICES, SUCH AS ELECTRONICS, APPLIANCES, HOUSEHOLD PRODUCTS, INSURANCE, RECREATIONAL GOODS, AND CARS. THE TESTS AND SURVEYS EVALUATE HOW THE PRODUCTS AND SERVICES PERFORM AND EDUCATE CONSUMERS ON THE EXTENT TO WHICH THEY ARE CONVENIENT, SAFE, AND ECONOMICAL. DURING THE FISCAL YEAR ENDED 5/31/16, CONSUMER REPORTS CONDUCTED TESTS AND EVALUATIONS ON MORE THAN 3000 MODELS OF VARIOUS CONSUMER PRODUCTS, MAKING USE OF ABOUT 60 LABORATORIES AND ITS AUTO TRACK. THE INFORMATION GATHERED AS RESULT OF THESE TESTS IS DISSEMINATED TO THE GENERAL PUBLIC AS DESCRIBED ABOVE. FORM 990, PART III, LINE 4B ADVOCACY AND EDUCATION PROGRAMS: Consumer Reports is dedicated to improving the lives of consumers and promoting a fairer, safer, and healthier world. We are an independent, nonprofit organization that seeks to educate consumers in order to drive a new era of consumer power and protection. For 80 years, we have built a legacy of trust among consumers through rigorous, scientific-based testing of the products we buy, as well as championing the rights of consumers in the halls of government, and in the increasingly complex marketplace that consumers must navigate each day. IN ADDITION, CONSUMER REPORTS PROVIDES SUBSTANTIAL FREE CONSUMER EDUCATION INFORMATION AS A PUBLIC SERVICE THROUGH OUR EDUCATIONAL WEBSITES AND THROUGH AN EXPANDING USE OF SOCIAL NETWORKING SITES AND BLOGS. CONSUMER REPORTS'S EDUCATIONAL WEBSITES INCLUDE: THE CONSUMER REPORTS'S ADVOCACY WEBSITE (CONSUMERSUNION.ORG); CONSUMER REPORTS BEST BUY DRUGS (CRBESTBUYDRUGS.ORG); CONSUMER HEALTH CHOICES (CONSUMERHEALTHCHOICES.ORG); SPANISH-LANGUAGE CONSUMER EDUCATION MATERIALS (ESPANOL.CONSUMERREPORTS.ORG); and CONSUMER REPORTS GREENER CHOICES (GREENERCHOICES.ORG). Our long-standing commitment to educate consumers and advocating for laws, policies and practices that benefit consumers is exemplified by the accomplishments we achieved in FY16. SOME SPECIFIC ACCOMPLISHMENTS INCLUDE: AUTO SAFETY: FY16 marked the end of a long, hard-fought and ultimately successful effort by CR to raise the bar for automobile safety. Today, when a car is recalled for a safety problem, such as a defective airbag, the law requires a new-car dealer to fix the vehicles on the lot before they are sold. However, this common-sense standard did not apply to rental cars. This little-known gap in the law left consumers unknowingly renting vehicles with safety defects. For years, CR shined the spotlight on this problem through our reporting, while we pushed Congress to put tougher standards in place, while battling opposition from industry. We prevailed in December 2015 with the passage of a new, national law that requires rental cars with safety recalls to be repaired before they are rented. While we celebrated this win, we are still fighting to get the same standard for the millions of used cars sold each year. PRODUCT SAFETY: CR marked another victory for safer products in January when President Obama signed a CR-endorsed law to protect children from liquid nicotine used in e-cigarettes and other vaping devices. Poison control centers reported a disturbing spike in the number of kids who were exposed to the highly-toxic liquid, which may come in bright colors with flavor names like”

“Form 990, part iv, line 12 consumer reports is audited in combination with its related organizations: consumers union action fund, inc. [ein: 20-4780406] and truman avenue foundation, inc. [ein: 20-5665599], although separate audited financial statements are not issued for consumer reports, a consolidated audited financial statement was issued for the fiscal year ended may 31, 2016, which was prepared in accordance with us generally accepted accounting principles.”

“Form 990, part vi, line 6 and 7a consumer reports is a new york state not-for-profit membership corporation. The members are any individual with a paid annual subscription to consumer reports magazine or consumerreports.org., who does one of the following: (1) gives notice of acceptance of membership; (2) sends in a nomination for the board of directors; or (3) returns to cr, the ballot transmitted in connection with the annual election of directors. Powers of members: 1. Members can elect the board of directors; 2. The annual report of consumer reports must be presented to members; 3. The members must meet at least annually; 4. By-laws of the organization may be adopted, amended, or repealed by members; 5. Members may demand to call a special meeting if at least 10% of the members call for a meeting within two to three months in the future.”

“Form 990, PART VI, LINE 11 THE 990 IS PREPARED UTILIZING THE ASSISTANCE OF OUR INDEPENDENT FINANCIAL AUDITOR, KPMG. THE RELATED SERVICES FROM KPMG ARE APPROVED BY THE AUDIT COMMITTEE AS PART OF THE AUDIT APPROVAL PROCESS. AFTER THE 990 IS PREPARED BY CR FINANCE DEPARTMENT WITH COORDINATION WITH KPMG, IT IS REVIEWED BY THE CONTROLLER AND CFO BEFORE IT IS REVIEWED AND APPROVED BY THE AUDIT COMMITTEE. A COPY OF THE 990 IS THEN PROVIDED TO THE BOARD OF DIRECTORS PRIOR TO ITS FILING.”

“Form 990, part vi, line 12c consumer reports's board of directors and staff members are required to fill out and sign a disclosure of interest statement and attestation of compliance each year. Board members' forms are reviewed by a committee of the board; staff members' forms are reviewed by an outside independent reviewer, and, if conflicts cannot be resolved, by a staff conflict of interest committee.”

“FORM 990, PART VI, LINES 15A and 15B CR'S EXECUTIVE COMPENSATION PROGRAM IS DESIGNED TO ATTRACT, ENGAGE, AND RETAIN HIGHLY TALENTED AND DEDICATED INDIVIDUALS WHO POSSESS THE PREREQUISITE SKILLS AND DEMONSTRATED PERFORMANCE NECESSARY TO FULFILL ITS MISSION. THE PROGRAM IS STRUCTURED TO PROVIDE TOTAL COMPENSATION DIRECT AND INDIRECT THAT SUPPORTS THE ACHIEVEMENT OF CR'S STRATEGIC AND OPERATING GOALS AND IS REASONABLY COMPETITIVE TO WHAT IS OFFERED BY COMPARABLE ORGANIZATIONS. CR ESTABLISHED AND MAINTAINS AN EXECUTIVE COMPENSATION PROGRAM THAT QUALIFIES FOR A REBUTTABLE PRESUMPTION OF REASONABLENESS AND PERIODICALLY REVIEWS ITS EXECUTIVE COMPENSATION TO ENSURE ONGOING ALIGNMENT WITH ITS STRATEGIC DIRECTION AND FINANCIAL LIMITS. TO ENSURE ITS EXECUTIVE COMPENSATION IS CONSISTENT WITH THIS COMPENSATION PHILOSOPHY, CR: - CLEARLY IDENTIFIES A SURVEY PEER GROUP AND PROTOCOL FOR BENCHMARKING AND DETERMINING THE REASONABLENESS OF TOTAL COMPENSATION IN RELATION TO MARKET NORMS FOR SIMILAR EXECUTIVE POSITIONS; - ENGAGES AN INDEPENDENT AND QUALIFIED COMPENSATION CONSULTANT TO PERIODICALLY COMPILE AND ANALYZE COMPETITIVE MARKET COMPENSATION FOR SIMILAR EXECUTIVES IN ORGANIZATIONS COMPARABLE TO CR - PROVIDES REASONABLY COMPETITIVE TOTAL COMPENSATION CONSISTENT WITH MARKET NORMS AND PERFORMANCE RESULTS IN ANY GIVEN YEAR; AND - PERIODICALLY EVALUATES AND REALIGNS PERFORMANCE MEASURES TO CONFORM TO CHANGING STRATEGIC GOALS AND OTHER BUSINESS NEEDS. ENSURES THAT THE EXECUTIVE COMPENSATION PROGRAM IS CONSISTENT WITH CR'S MISSION AND TAX-EXEMPT STATUS AND THAT COMPENSATION IS BOTH COMPETITIVE AND REASONABLE IS A SHARED RESPONSIBILITY OF THE BOARD OF DIRECTORS AND ITS COMMITTEES AND, WITH RESPECT TO EXECUTIVES OTHER THAN HERSELF, CR'S PRESIDENT.”

“Form 990, part vi, line 19 consumer reports's annual financial statements are made available to the public on its website, www.consumerreports.org. Our governing documents, form 1023, and conflict of interest policy are available to the public upon request.”

“Part xi, line 9 unrealized loss interest rate swap $( 690,043) pension related changes $(10,061,890) change in value of split interest agreement $( 497,485) rounding $ 1,533 ____________ total other changes in net assets or fund balances $(11,247,885) ============”