2013-11-13T13:27:45-06:00 2012-12-31 135381590 BDO USA LLP 7101 WISCONSIN AVE SUITE 800 BETHESDA MD 208144827 990 2012-01-01 760742496 SOUNDEXCHANGE INC SOUN 2026405858 733 10TH STREET NW 10TH FLOOR WASHINGTON DC 20001 ANJULA SINGH 2026405858 2013-11-13 1 JOYCE M UNDERWOOD P00022361 3016544900 2012 2016-02-25 16:41:14Z MICHAEL J HUPPE 733 10TH STREET NW 10TH FLOOR WASHINGTON DC 20001 25681137 0 X WWW.SOUNDEXCHANGE.COM X 2003 DE SOUNDEXCHANGE'S PRIMARY EXEMPT PURPOSE IS TO COLLECT AND DISTRIBUTE ROYALTIES FOR SOUND RECORDINGS COPYRIGHT OWNERS, FEATURED ARTISTS, AND NON-FEATURED ARTISTS. 18 18 116 21 0 0 0 0 20386274 25226374 597734 454763 0 0 20984008 25681137 0 0 0 0 6408620 9603131 0 0 0 14626582 16066270 21035202 25669401 -51194 11736 369449828 394954142 368393647 393897961 1056181 1056181 X SEE SCHEDULE O 0 0 SOUNDEXCHANGE HELPS THE MUSIC AND CREATIVE COMMUNITY THRIVE IN THE DIGITAL AGE. WE'RE THE PREMIER DIGITAL PERFORMANCE RIGHTS ORGANIZATION IN THE WORLD, WITH A MISSION TO SUPPORT, PROTECT AND PROPEL THE MUSIC INDUSTRY FORWARD. DURING FY2012, SOUNDEXCHANGE REPRESENTED THE INTERESTS OF ALL SOUND RECORDING COPYRIGHT OWNERS AND PERFORMERS ON WHOSE BEHALF IT IS AUTHORIZED BY THE U.S. COPYRIGHT OFFICE TO COLLECT AND DISTRIBUTE ROYALTIES PAID UNDER THE STATUTORY LICENSES SET FORTH IN SECTIONS 112 AND 114 OF TITLE 17 OF THE UNITED STATES CODE. AS THE SOLE ENTITY DESIGNATED BY THE U.S. COPYRIGHT OFFICE TO RECEIVE PAYMENTS FROM SERVICES OPERATING UNDER STATUTORY LICENSE, SOUNDEXCHANGE REPRESENTS THE INTERESTS OF ALL COPYRIGHT OWNERS AND PERFORMERS WHOSE WORKS HAVE BEEN PERFORMED. (SEE SCHEDULE O FOR CONTINUATION.) 0 0 0 0 0 0 0 0 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 22033 0 1 116 1 0 0 0 0 0 0 X 18 18 0 0 0 0 0 0 0 1 0 0 0 0 1 1 1 0 0 1 1 0 DC X ANJULA SINGH 2026405870 733 10TH STREET NW 10TH FLOOR WASHINGTON DC 20001 ALASDAIR MCMULLAN 1.00 X 0 0 0 DUNCAN CRABTREE - IRELAND 1.00 X 0 0 0 JEFF HARLESTON 1.00 X 0 0 0 ANDREA FINKELSTEIN 1.00 X 0 0 0 STEVE MARKS 1.00 X 0 0 0 TOM SILVERMAN 1.00 X 0 0 0 DICK HUEY 1.00 X 0 0 0 RICHARD BENGLOFF 1.00 X 0 0 0 CARY SHERMAN 1.00 X 0 0 0 RAY HAIR 1.00 X 0 0 0 PAUL ROBINSON 1.00 X 0 0 0 PATRICK RAINS 1.00 X 0 0 0 KENDALL MINTER 1.00 X 0 0 0 MARTHA REEVES 1.00 X 0 0 0 PERRY RESNICK 1.00 X 0 0 0 JAY L COOPER 1.00 X 0 0 0 WALTER F MCDONOUGH 1.00 X 0 0 0 MICHAEL HAUSMAN 1.00 X 0 0 0 KIM ROBERTS 1.00 X 0 0 0 PATRICIA POLLACH 1.00 X 0 0 0 TUCKER MCCRADY 1.00 X 0 0 0 MICHAEL J HUPPE 40.00 X 685758 0 18099 JONATHAN BENDER 40.00 X 306090 0 5045 COLIN RUSHING 40.00 X 269706 0 23928 ANJULA SINGH 40.00 X 265705 0 14040 SCOTT DAY 40.00 X 278031 0 6892 BRADLEY PRENDERGAST 40.00 X 188659 0 12287 CHRISTOPHER DEAN 40.00 X 171176 0 8854 MARIE FARRAR KNOWLES 40.00 X 169175 0 2999 TIMOTHY DADSON 40.00 X 167226 0 2432 LUIS BONILLA 40.00 X 155381 0 5182 2656907 0 99758 18 0 1 0 JENNER & BLOCK LLP 353 N CLARK STREET CHICAGO IL 60654 LEGAL 8000872 ACUMEN SOLUTIONS INC 1660 INTERNATIONAL DRIVE 5TH FLOOR MCLEAN VA 22102 IT CONSULTING 2783350 ROBERT HALF INTERNATIONAL INC 12400 COLLECTIONS CENTER DR CHICAGO IL 60693 TEMPORARY HELP 591452 TEN MILE SQUARE TECHNOLOGIES 803 WEST BROAD ST 210 FALLS CHURCH VA 22046 IT CONSULTING 531198 NEOVERA 1840 MICHAEL FARADAY DRIVE STE 240 RESTON VA 20190 IT CONSULTING 466294 14 ROYALTY COLLECTION 900099 24778971 24778971 COST RECOVERY FEES 900099 447403 447403 25226374 454763 454763 25681137 25226374 0 454763 X 1941298 6361939 160362 575627 563905 595801 73018 181411 216728 2579378 129534 384455 3517275 1284066 446804 101795 7898 5365073 122617 COST RECOVERY 447403 TAXES 157810 DUES AND SUBSCRIPTIONS 145486 EVENTS 86421 223297 25669401 100 100 75976759 99006344 539633 697871 12075871 4076008 3882807 7999863 282306935 276529400 6743594 10720564 369449828 394954142 4250835 3930888 715814 3540605 363426998 386426468 368393647 393897961 X 1056181 1056181 1056181 1056181 369449828 394954142 11736 -11736 0 X X 0 1 X 0 0 2581714 134480 2447234 1360814 572069 788745 8133343 3369459 4763884 7999863 CAPITAL LEASES PAYABLE 325219 FUNDS HELD IN AGENCY (SEE PART XIV) 386101249 386426468 X 25452673 -11736 -11736 25464409 216728 216728 25681137 25452673 0 25452673 216728 216728 25669401 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: UNDER ASC 740-10, ACCOUNTING FOR UNCERTAINLY IN INCOME TAXES, AN ORGANIZATION MUST RECOGNIZE INCOME TAX BENEFITS FOR INCOME TAX POSITIONS TAKEN OR EXPECTED TO BE TAKEN IN A TAX RETURN, ONLY WHEN IT IS DETERMINED THAT THE INCOME TAX POSITION WILL MORE-LIKELY-THAN-NOT BE SUSTAINED UPON EXAMINATION BY TAXING AUTHORITIES. THE ORGANIZATION ANALYZED TAX POSITIONS TAKEN FOR FILING WITH THE INTERNAL REVENUE SERVICE AND ALL STATE JURISDICTIONS WHERE IT OPERATES. THE ORGANIZATION BELIEVES THAT INCOME TAX FILING POSITIONS WILL BE SUSTAINED UPON EXAMINATION AND DOES NOT ANTICIPATE ANY ADJUSTMENTS THAT WOULD RESULT IN A MATERIAL ADVERSE EFFECT ON THE ORGANIZATION'S FINANCIAL CONDITION, RESULTS OF OPERATIONS OR CASH FLOWS. ACCORDINGLY, THE ORGANIZATION HAS NOT RECORDED ANY RESERVES, OR RELATED ACCRUALS FOR INTEREST AND PENALTIES FOR UNCERTAIN INCOME TAX POSITIONS AT DECEMBER 31, 2012 AND 2011. THE ORGANIZATION IS SUBJECT TO ROUTINE AUDITS BY TAXING JURISDICTIONS; HOWEVER, THERE ARE CURRENTLY NO AUDITS FOR ANY OPEN TAX PERIODS. THE ORGANIZATION BELIEVES IT IS NO LONGER SUBJECT TO INCOME TAX EXAMINATIONS FOR YEARS PRIOR TO 2009. PART X - FUNDS HELD IN AGENCY ROYALTIES PAYMENTS ARE DUE 45 DAYS AFTER THE END OF THE MONTH. A RECEIVABLE AND CORRESPONDING LIABILITY ARE RECORDED FOR ROYALTIES RELATING TO 2012, BUT COLLECTED AFTER DECEMBER 31, 2012. THE FUNDS HELD IN AGENCY BALANCE OF $386,101,249 AT DECEMBER 31, 2012 INCLUDED A $90.8 MILLION ACCRUAL FOR SUCH ROYALTIES. X X 1 1 X X X 1 0 0 MICHAEL J HUPPE 530430 0 150000 0 5328 0 11750 0 6349 0 703857 0 0 0 JONATHAN BENDER 279344 0 22000 0 4746 0 1696 0 3349 0 311135 0 0 0 COLIN RUSHING 234882 0 30000 0 4824 0 11748 0 12180 0 293634 0 0 0 ANJULA SINGH 228928 0 32000 0 4777 0 11348 0 2692 0 279745 0 0 0 SCOTT DAY 253176 0 20000 0 4855 0 2712 0 4180 0 284923 0 0 0 BRADLEY PRENDERGAST 176731 0 10000 0 1928 0 8869 0 3418 0 200946 0 0 0 CHRISTOPHER DEAN 111481 0 5800 0 53895 0 6046 0 2808 0 180030 0 0 0 MARIE FARRAR KNOWLES 162001 0 3000 0 4174 0 0 0 2999 0 172174 0 0 0 TIMOTHY DADSON 165644 0 0 0 1582 0 0 0 2432 0 169658 0 0 0 LUIS BONILLA 150538 0 3000 0 1843 0 1307 0 3875 0 160563 0 0 0 PART I, LINE 1A OUR PRESIDENT IS PERMITTED SPOUSAL COMPANION TRAVEL REIMBURSEMENT OF UP TO $5,000 ANNUALLY. WHERE APPLICABLE, THE TAX ON SHORT-TERM AND LONG-TERM DISABILITY IS GROSSED UP. PART I, LINE 4A CHRIS DEAN WAS PAID $40,000 IN SEVERANCE PAYMENTS IN 2012, BASED ON SERVICE TO THE ORGANIZATION AND SUBJECT TO TERMS AND CONDITIONS THAT ARE CONSISTENT WITH INDUSTRY PRACTICE. ORGANIZATION MISSION STATEMENT FORM 990, PART III, LINE 1 SOUNDEXCHANGE HELPS THE MUSIC AND CREATIVE COMMUNITY THRIVE IN THE DIGITAL AGE. WE'RE THE PREMIER DIGITAL PERFORMANCE RIGHTS ORGANIZATION IN THE WORLD, WITH A MISSION TO SUPPORT, PROTECT AND PROPEL THE MUSIC INDUSTRY FORWARD. DURING FY2012, SOUNDEXCHANGE REPRESENTED THE INTERESTS OF ALL SOUND RECORDING COPYRIGHT OWNERS AND PERFORMERS ON WHOSE BEHALF IT IS AUTHORIZED BY THE US COPYRIGHT OFFICE TO COLLECT AND DISTRIBUTE ROYALTIES PAID UNDER THE STATUTORY LICENSES SET FORTH IN SECTIONS 112 AND 114 OF TITLE 17 OF THE UNITED STATES CODE. AS THE SOLE ENTITY DESIGNATED BY THE U.S. COPYRIGHT OFFICE TO RECEIVE PAYMENTS FROM SERVICES OPERATING UNDER STATUTORY LICENSE, SOUNDEXCHANGE REPRESENTS THE INTERESTS OF ALL COPYRIGHT OWNERS AND PERFORMERS WHOSE WORKS HAVE BEEN PERFORMED. SOUNDEXCHANGE ALSO ADMINISTERS NON-STATUTORY LICENSING ARRANGEMENTS BETWEEN SOUND RECORDING COPYRIGHT OWNERS AND SERVICES PERFORMING THE WORKS OF THOSE SOUND RECORDING COPYRIGHT OWNERS, AND COLLECTS AND DISTRIBUTES ROYALTIES RECEIVED FROM FOREIGN PERFORMING RIGHTS ORGANIZATIONS ON BEHALF OF ITS MEMBERS. SOUNDEXCHANGE COLLECTED ROYALTIES FROM VARIOUS CLASSES OF LICENSEES, INCLUDING PRE-EXISTING SUBSCRIPTION SERVICES, PRE-EXISTING SATELLITE DIGITAL AUDIO RADIO SERVICES, INTERNET-ONLY WEBCASTERS, BROADCAST SIMULCASTERS AND NONCOMMERCIAL ENTITIES. SOUNDEXCHANGE COLLECTS ROYALTIES FROM APPROXIMATELY 2,000 LICENSEES AND DISTRIBUTES ROYALTIES TO OVER 28,000 SOUND RECORDING COPYRIGHT OWNER ACCOUNTS AND 90,000 PERFORMER ACCOUNTS. SOUNDEXCHANGE ALSO DISTRIBUTED ROYALTIES TO THE INDEPENDENT ADMINISTRATORS. (CONTINUATION) FORM 990, PART III, LINE 4A SOUNDEXCHANGE ALSO ADMINISTERS NON-STATUTORY LICENSING ARRANGEMENTS BETWEEN SOUND RECORDING COPYRIGHT OWNERS AND SERVICES PERFORMING THE WORKS OF THOSE SOUND RECORDING COPYRIGHT OWNERS, AND COLLECTS AND DISTRIBUTES ROYALTIES RECEIVED FROM FOREIGN PERFORMING RIGHTS ORGANIZATIONS ON BEHALF OF ITS MEMBERS. SOUNDEXCHANGE COLLECTED ROYALTIES FROM VARIOUS CLASSES OF LICENSEES, INCLUDING PRE-EXISTING SUBSCRIPTION SERVICES, PRE-EXISTING SATELLITE DIGITAL AUDIO RADIO SERVICES, INTERNET-ONLY WEBCASTERS, BROADCAST SIMULCASTERS, AND NONCOMMERCIAL ENTITIES. SOUNDEXCHANGE COLLECTS ROYALTIES FROM APPROXIMATELY 2,000 LICENSEES AND DISTRIBUTES ROYALTIES TO OVER 28,000 SOUND RECORDING COPYRIGHT OWNER ACCOUNTS AND 90,000 PERFORMER ACCOUNTS. SOUNDEXCHANGE ALSO DISTRIBUTED ROYALTIES TO THE INDEPENDENT ADMINISTRATORS. FORM 990, PART VI, SECTION A, LINE 8B SOUNDEXCHANGE DOES NOT KEEP WRITTEN MINUTES OF ALL OF ITS COMMITTEE MEETINGS. IN PARTICULAR, WE DO NOT KEEP MINUTES OF OUR LICENSING COMMITTEE OR FINANCE COMMITTEE MEETINGS DUE TO THE SENSITIVITY OF MATTERS DISCUSSED IN THOSE MEETINGS. OUR BYLAWS MAKE CLEAR THAT MINUTES ARE NOT MANDATORY. WE DO KEEP WRITTEN MINUTES OF ALL BOARD MEETINGS. FORM 990, PART VI, SECTION B, LINE 11 MANAGEMENT WILL REVIEW THE 990 PRIOR TO FILING, AND A DRAFT IS PROVIDED TO THE FINANCE COMMITTEE PRIOR TO FILING. A COPY OF THE FILED 990 WILL BE PROVIDED TO THE FULL BOARD. FORM 990, PART VI, SECTION B, LINE 12C THE SOUNDEXCHANGE BY-LAWS REQUIRE THE DISCLOSURE OF ANY POTENTIAL CONFLICTS OF INTEREST. IN ADDITION, THE MEMBERS OF THE BOARD OF DIRECTORS COMPLETE AN ANNUAL QUESTIONNAIRE THAT ASKS IF THERE HAVE BEEN ANY CONFLICTS OF INTEREST IN THE REPORTING YEAR. FORM 990, PART VI, SECTION B, LINE 15 THE COMPENSATION COMMITTE, COMPRISING OF MEMBERS OF THE BOARD OF DIRECTORS, CONSIDERS EXTERNAL SALARY DATA , SCOPE AND COMPLEXITY OF THE RESPONSIBILITIES OF THE POSITION, IN DETERMINING, AND RECOMMENDING TO THE FULL BOARD FOR APPROVAL, THE PRESIDENT AND CEO'S EXECUTIVE COMPENSATION. THE PRESIDENT AND CEO ASSESSES COMPENSATION FOR THE OFFICERS AND OTHER EXECUTIVE TEAM MEMBERS BY UTILIZING RELEVANT EXTERNAL COMPARABLE SALARY DATA FOR LIKE RESPONSIBILITIES AT NOT-FOR-PROFIT AND FOR-PROFIT ORGANIZATIONS, EXPERIENCE AND ANNUAL PERFORMANCE REVIEW PROCESS. FORM 990, PART VI, SECTION C, LINE 19 THE GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT MADE AVAILABLE TO THE PUBLIC. A NON-GAAP VERSION OF THE FINANCIAL STATEMENTS IS MADE AVAILABLE ON SOUNDEXCHANGE'S WEBSITE. OTHER FEES FORM 990, PART IX, LINE 11G CONSULTANTS: TOTAL EXPENSES 619,032. RECRUITING FEES: TOTAL EXPENSES 277,102. TEMPORARY HELP: TOTAL EXPENSES 1,683,244. OVERSIGHT OF AUDIT: FORM 990, PART XII, LINE 2C THERE HAVE BEEN NO CHANGES DURING THE YEAR IN THE PROCESS FOR OVERSIGHT OF THE AUDIT OF THE FINANCIAL STATEMENTS.