2013-11-12T10:41:08-06:00 2012-12-31 861065772 DELOITTE TAX LLP 655 WEST BROADWAY SUITE 700 SAN DIEGO CA 921018590 990 2012-01-01 953797687 GEMOLOGICAL INSTITUTE OF AMERICA INC GEMO 7606034000 5345 ARMADA DRIVE CARLSBAD CA 920084602 DAVID J TEARLE 7606034000 2013-11-11 1 SHARON ZORBACH P00125475 6192326500 2012 2016-03-07 17:11:31Z SUSAN JACQUES 5345 ARMADA DRIVE CARLSBAD CA 920084602 213799592 0 X WWW.GIA.EDU X 1931 CA SEE SCHEDULE O FOR ORGANIZATION MISSION STATEMENT. 18 16 1175 26 675905 -70164 340850 243742 153997991 145128544 8099745 4065250 17573462 30859379 180012048 180296915 458965 718959 0 0 77623061 82358132 0 0 22353 53019110 74447564 131101136 157524655 48910912 22772260 324244613 414066168 54383296 114453334 269861317 299612834 X SEE SCHEDULE O FOR ORGANIZATION MISSION STATEMENT. 0 0 22771767 718959 14162366 EDUCATION:SEE SCHEDULE O FOR DESCRIPTION OF EXEMPT PURPOSE ACHIEVEMENTS. 117804305 130118307 LABORATORY:SEE SCHEDULE O FOR DESCRIPTION OF EXEMPT PURPOSE ACHIEVEMENTS. 3480090 310384 RESEARCH & PUBLICATIONS:SEE SCHEDULE O FOR DESCRIPTION OF EXEMPT PURPOSE ACHIEVEMENTS. 144056162 1 1 0 0 0 0 0 0 0 1 1 0 0 1 1 1 0 1 1 1 1 1 1 0 0 0 0 1 1 1 0 0 0 0 0 0 0 1 1 0 0 0 1 1 1 1 1 0 1 X 134 0 1 1175 1 1 1 1 SF TW AE TH BE BC HK IN IS UK JA 0 0 0 0 0 0 0 0 0 X 18 16 0 0 0 0 0 0 0 1 1 0 1 1 1 1 1 1 1 1 1 1 0 AL AK AZ AR CA CO CT FL GA IL KS KY ME MD MA MI MN MS NH NJ NY NC ND OH OK OR PA RI SC TN UT VA WA WV WI X DAVID J TEARLE VICE PRESIDENT AND CFO 7606034000 5345 ARMADA DRIVE CARLSBAD CA 920084602 X DONNA BAKER 39.00 1.00 X X 564775 0 46424 AMIT DHAMANI 1.00 0.00 X 0 0 0 RODNEY C EWING 1.00 0.00 X 6000 0 0 JEFFREY H FISCHER 1.00 0.00 X 6000 0 0 JOHN A GREEN 1.00 0.00 X 6000 0 0 THOMAS INSLEY 1.00 0.00 X 6000 0 0 SUSAN JACQUES 1.00 0.00 X 6000 0 0 DIONE D KENYON 1.00 0.00 X 0 0 0 PAUL KREUTZ 1.00 0.00 X 6000 0 0 FREDERICK N LEVINGER 1.00 0.00 X 6594 0 0 LISA LOCKLEAR 1.00 0.00 X 3000 0 0 ROLAND NAFTULE 1.00 0.00 X 6576 0 0 GLENN R NORD 1.00 0.00 X 0 0 0 STEVE RELYEA 1.00 0.00 X 3591 0 0 JAMES P SHINEHOUSE 1.00 0.00 X 0 0 0 HANK B SIEGEL 1.00 0.00 X 6000 0 0 ARON SUNA 1.00 0.00 X 6000 0 0 THOMAS YANG 1.00 0.00 X 6000 0 0 EPHRAIM ZION 1.00 0.00 X 6000 0 0 THOMAS MOSES 39.00 1.00 X 668269 0 34045 DAVID TEARLE 39.00 1.00 X 357538 0 38224 LINDA ELLIS 40.00 0.00 X 230995 0 20152 TAWFIC FARAH 40.00 0.00 X 300215 0 28391 BEVERLY HORI 40.00 0.00 X 340484 0 38694 KATHRYN KIMMEL 40.00 0.00 X 278364 0 25081 CYNTHIA SANDERS 40.00 0.00 X 203063 0 21589 LINDA SCHOLL 40.00 0.00 X 277712 0 24379 RICHARD SUMMERS 40.00 0.00 X 261423 0 14130 PHILLIP YANTZER 40.00 0.00 X 211459 0 35677 JOHN M KING 40.00 0.00 X 225477 0 30067 SUSAN SCHINDELAR 40.00 0.00 X 212876 0 35203 DONALD J FOSTER 40.00 0.00 X 204405 0 30919 TIMOTHY N THOMAS 40.00 0.00 X 191524 0 36507 JOHN RADZINS 40.00 0.00 X 188558 0 15040 4796898 0 474522 110 0 1 0 THE SHAND GROUP 1300 SANTA BARBARA ST SANTA BARBARA CA 93101 MARKETING 4694908 KPMG LLP PO BOX 120922 DALLAS TX 753120922 CONSULTING 2991633 DLA PIPER US LLP 401 B STREET SUITE 1700 SAN DIEGO CA 921014297 LEGAL SERVICES 2905466 SIMPLER NORTH AMERICA LP PO BOX 64399 PITTSBURGH PA 152643979 LEAN CONSULTING 2595231 TCS AMERICA 12977 COLLECTION CENTER DRIVE CHICAGO IL 60693 IT SERVICES 2364234 38 243742 215827 243742 GEMOLOGICAL LABORATORY 541900 130118307 130118307 TUITION & FEES 611600 14699853 14699853 GEMOLOGY PUBLICATIONS 511120 310384 310384 145128544 3589378 3589378 30720961 30720961 31742828 13804 30543801 736959 1199027 -723155 475872 475872 3390793 2221917 1168876 521555 647321 MISCELLANEOUS REVENUE 900099 125303 121907 3396 NET MANAGEMENT FEE 900099 27462 27462 FOREIGN EXCHANGE LOSS 900099 -1183223 -1180949 -2274 -1030458 180296915 144591057 675905 34786211 35150 35150 361050 361050 322759 322759 3774058 2471769 1302289 56970567 54975093 1975771 19703 5161330 4628594 531199 1537 11480494 10582560 897934 4971683 4546144 424426 1113 3520573 3520573 397299 66830 330469 589138 589138 14073239 11986025 2087214 5469781 5462801 6980 6854427 6670459 183968 4069023 4022032 46991 5368930 5368755 175 3154692 2181352 973340 672948 619815 53133 6982432 6914828 67604 1338630 1157564 181066 PATENT SETTLEMENT 15000000 15000000 0 0 FOREIGN WITHHOLDING TAX 3718979 3718979 0 0 MAINTENANCE 2552794 2544355 8439 0 684679 419248 265431 157524655 144056162 13446140 22353 16938941 18776106 22395677 39158823 353608 18000 48266799 48458344 1877112 2712043 3001917 2683376 3096357 189380440 68079762 66214882 121300678 113493259 119083899 51186028 59294932 324244613 414066168 4046250 4573744 4341331 4311025 45995715 105568565 54383296 114453334 X 256561490 285455025 1101582 1892320 12198245 12265489 269861317 299612834 324244613 414066168 X 22772260 5190403 26373 1762481 X 0 1 X 1 1 1 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 67150391 500 8319258 716466 1858849 0 72894834 67584620 172917 -410686 423921 -158244 -69217 67150391 61080217 50000 6827503 171078 39289 162733 67584620 53275261 268637 7754949 218630 61080217 70869286 145033 -17502143 236915 53275261 0.80780 0.02390 0.16830 0 0 13227037 13227037 58834481 26744301 32090180 20989176 14335099 6654077 96329746 27000362 69329384 121300678 GEM COLLECTIONS 26205111 INVESTMENT IN SUBSIDIARIES 32541924 OTHER ASSETS 547897 59294932 ACCRUED PAYROLL 763420 OTHER CURRENT LIABILITIES 16721198 SALES & USE TAX PAYABLE 9232 OTHER LONG TERM LIABILITIES 53254437 ACCRUED PAID TIME OFF 7450048 ACCRUED PENSION EXPENSE 21934977 INTERCOMPANY ACCOUNTS 5435253 105568565 X DESCRIPTION OF INTENDED USE OF ENDOWMENT FUNDS: PART V, LINE 4: GIA USES ENDOWMENT FUNDS FOR ACTIVITIES PURSUANT TO THE INSTITUTE'S MISSION, WHICH IS SUMMARIZED IN THE RESPONSE TO PART III, ITEM 1. DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: THE INSTITUTE ADOPTED ASC 740-10, ACCOUNTING FOR INCOME TAXES, ON JANUARY 1, 2007. AS OF THE DATE OF ADOPTION THROUGH DECEMBER 31, 2012, THE INSTITUTE HAD NO LIABILITY FOR UNRECOGNIZED TAX BENEFITS. THE INSTITUTE WOULD RECOGNIZE INTEREST AND PENALTIES RELATED TO UNCERTAIN TAX BENEFITS AS INCOME TAX EXPENSE WHEN ACCRUED. AS THE INSTITUTE HAD NO LIABILITIES FOR UNCERTAIN TAX POSITIONS, THERE HAS BEEN NO ACCRUAL FOR INTEREST AND PENALTIES FOR THE YEARS ENDED DECEMBER 31, 2012 OR 2011. PART V, LINE 1E: THESE AMOUNTS INCLUDE CHANGES IN PRESENT VALUE FOR THE YEAR. 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 1 0 1 EXPLANATION OF NONDISCRIMINATORY POLICY PUBLICATION SCHEDULE E, PART I, LINE 3 THE INSTITUTE'S BROCHURES AND APPLICATIONS ALL INCLUDE STATEMENTS OF ITS RACIAL NONDISCRIMINATION POLICY. THE INSTITUTE CUSTOMARILY DRAWS A SUBSTANTIAL PERCENTAGE OF ITS STUDENTS NATIONWIDE OR WORLDWIDE AND FOLLOWS A RACIAL NONDISCRIMINATION POLICY. ACCORDINGLY, THE NEWSPAPER OR BROADCAST PUBLICATION REQUIREMENT IS SATISFIED BY ADHERENCE TO REV. PROC. 75-50, SECTION 4.02. EXPLANATION OF GOVERNMENT FINANCIAL ASSISTANCE SCHEDULE E, PART I, LINE 6 GIA IS ACCREDITED BY ACCSC, WHICH IS RECOGNIZED BY THE US DEPARTMENT OF EDUCATION. GIA PARTICIPATES IN TITLE IV PROGRAMS. GIA ALSO ACCEPTS VETERAN'S BENEFITS FOR PROGRAMS THAT QUALIFY. 1 EAST ASIA AND THE PACIFIC 0 0 SCHOLARSHIP GRANTS TO RECIPIENTS IN REGION SCHOLARSHIPS TO PARTICIPATE IN THE INSTITUTE'S SCHOOL PROGRAMS. 69502 EUROPE (INCLUDING ICELAND & GREENLAND) 0 0 SCHOLARSHIP GRANTS TO RECIPIENTS IN REGION SCHOLARSHIPS TO PARTICIPATE IN THE INSTITUTE'S SCHOOL PROGRAMS. 39583 MIDDLE EAST AND NORTH AFRICA 0 0 SCHOLARSHIP GRANTS TO RECIPIENTS IN REGION SCHOLARSHIPS TO PARTICIPATE IN THE INSTITUTE'S SCHOOL PROGRAMS. 6257 NORTH AMERICA 0 0 GRANT-MAKING EDUCATION DELIVERY 20000 SOUTH ASIA 0 0 SCHOLARSHIP GRANTS TO RECIPIENTS IN REGION SCHOLARSHIPS TO PARTICIPATE IN THE INSTITUTE'S SCHOOL PROGRAMS. 76282 SUB-SAHARAN AFRICA 0 0 GRANT-MAKING EDUCATION DELIVERY 111504 EUROPE (INCLUDING ICELAND & GREENLAND) 0 0 PROGRAM SERVICES SCIENTIFIC INSTRUMENT SALES 431401 MIDDLE EAST AND NORTH AFRICA 1 63 PROGRAM SERVICES LAB AND RESEARCH SERVICES 1596828 MIDDLE EAST AND NORTH AFRICA 0 0 INVESTMENTS IN WHOLLY OWNED SUBSIDIARIES WHOLLY OWNED SUBSIDIARIES -2527561 EUROPE 0 0 INVESTMENTS IN WHOLLY OWNED SUBSIDIARIES WHOLLY OWNED SUBSIDIARIES 2175260 EAST ASIA AND THE PACIFIC 0 0 INVESTMENTS IN WHOLLY OWNED SUBSIDIARIES WHOLLY OWNED SUBSIDIARIES 7081962 SOUTH ASIA 0 0 INVESTMENTS IN WHOLLY OWNED SUBSIDIARIES WHOLLY OWNED SUBSIDIARIES 26704736 SUB-SAHARAN AFRICA 0 0 INVESTMENTS IN WHOLLY OWNED SUBSIDIARIES WHOLLY OWNED SUBSIDIARIES 310585 EAST ASIA AND THE PACIFIC 0 0 CAPITAL CONTRIBUTION TO WHOLLY OWNED SUBSIDIARY WHOLLY OWNED SUBSIDIARIES 2061276 1 63 0 0 1 63 2351357 35806258 38157615 NORTH AMERICA PROGRAM SUPPORT 20000 CHECK SUB-SAHARAN AFRICA EDUCATION DELIVERY 24114 CHECK SUB-SAHARAN AFRICA EDUCATION DELIVERY 25000 CHECK SUB-SAHARAN AFRICA EDUCATION DELIVERY 22968 CHECK SUB-SAHARAN AFRICA EDUCATION DELIVERY 13362 CHECK SUB-SAHARAN AFRICA EDUCATION DELIVERY 21637 CHECK EAST ASIA AND THE PACIFIC CAPITAL CONTRIBUTION TO WHOLLY OWNED SUBSIDIARY 2061276 ELECTRONIC FUND/WIRE 2 5 SCHOLARSHIP AWARDS EAST ASIA AND THE PACIFIC 7 0 69502 TUITION REDUCTION FMV SCHOLARSHIP AWARDS EUROPE (INCLUDING ICELAND & GREENLAND) 6 0 39583 TUITION REDUCTION FMV SCHOLARSHIP AWARDS MIDDLE EAST AND NORTH AFRICA 5 0 6257 TUITION REDUCTION FMV SCHOLARSHIP AWARDS SOUTH ASIA 16 0 76282 TUITION REDUCTION FMV 1 0 1 0 0 1 PROCEDURE FOR MONITORING GRANTS OUTSIDE THE U.S.: SCHEDULE F, PART I, LINE 2: AFTER GIA RECEIVES THE SIGNED ACCEPTANCE FORM AND THE STUDENT ENROLLS, AN AWARD LINE IS SET UP IN PEOPLESOFT TO READY THE AWARD FOR DISBURSEMENT. THE AWARD IS DISBURSED THROUGH THE PEOPLESOFT SYSTEM AS A CREDIT TO THE STUDENT'S TUITION ACCOUNT. THE FUNDS ARE NOT DISBURSED DIRECTLY TO THE STUDENT UNLESS THE PROVISIONS OF THE SCHOLARSHIP INCLUDE LIVING EXPENSES; ANY SUCH AWARD IS DISBURSED THROUGH PEOPLESOFT IN THE SAME MANNER AS OTHER FINANCIAL AID DESIGNATED FOR LIVING EXPENSES. THE INTERNATIONAL SCHOOL MUST INITIATE THE PROCESS OF TRANSFERRING FUNDS FROM GIA CARLSBAD BY SUBMITTING A WRITTEN INVOICE TO THE SCHOLARSHIP COORDINATOR AT GIA CARLSBAD; EMAIL IS ACCEPTABLE. THE INVOICE MUST INCLUDE THE SCHOLARSHIP RECIPIENT'S NAME, STUDENT NUMBER, SCHOLARSHIP AWARD AMOUNT IN LOCAL CURRENCY, NAME OF THE SCHOLARSHIP, AND COURSE ENROLLMENT INFORMATION (START DATE, COURSE NAME AND NUMBER). GIA CARLSBAD TRANSFERS THE FUNDS TO THE SCHOOL WHEN THE SCHOLARSHIP RECIPIENTS BEGIN THEIR QUALIFIED COURSE OF STUDY AT GIA INDIA, GIA ENGLAND, GIA (INTERNATIONAL) COMPANY, LTD (AKA GIA THAILAND SCHOOL), GIA HONG KONG LIMITED OR GIA MIDDLE EAST (L.C.C.). 1 FEDERAL BUREAU OF INVESTIGATION 935 PENNSYLVANIA AVE NW ROOM 3349 WASHINGTON DC 20535 GOV'T ENTITY 28215 TRAINING SEMINAR FOR FBI SPECIAL AGENTS AND LAW ENFORCEMENT OFFICERS 1 0 SCHOLARSHIP AWARDS 156 361050 FMV TUITION REDUCTION PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: SCHOLARSHIPS - AFTER GIA RECEIVES THE SIGNED ACCEPTANCE FORM AND THE STUDENT ENROLLS, AN AWARD LINE IS SET UP IN PEOPLESOFT TO READY THE AWARD FOR DISBURSEMENT. THE AWARD IS DISBURSED THROUGH THE PEOPLESOFT SYSTEM AS A CREDIT TO THE STUDENT'S TUITION ACCOUNT. THE FUNDS ARE NOT DISBURSED DIRECTLY TO THE STUDENT UNLESS THE PROVISIONS OF THE SCHOLARSHIP INCLUDE LIVING EXPENSES; ANY SUCH AWARD IS DISBURSED THROUGH PEOPLESOFT IN THE SAME MANNER AS OTHER FINANCIAL AID DESIGNATED FOR LIVING EXPENSES. FBI SEMINAR - IN 2012, GIA OFFERED A TWO-WEEK GEMOLOGY TRAINING SEMINAR FREE OF CHARGE FOR FBI AND OTHER LAW ENFORCEMENT OFFICERS. THE PURPOSE OF THE TRAINING SEMINAR WAS TO ASSIST THE LAW ENFORCEMENT OFFICERS IN THE INVESTIGATION AND PROSECUTION OF JEWELRY RELATED CRIMES. GIA DIRECTLY PAID THE SEMINAR-RELATED EXPENSES AND PROVIDED EXPERT INSTRUCTORS FOR THE PROGRAM. X 1 1 X X X X X 1 0 0 0 0 0 0 1 0 DONNA BAKER 462401 0 100000 0 2374 0 20000 0 26424 0 611199 0 0 0 THOMAS MOSES 406631 0 60000 0 201638 0 20000 0 14045 0 702314 0 0 0 DAVID TEARLE 316268 0 40000 0 1270 0 20000 0 18224 0 395762 0 0 0 LINDA ELLIS 205310 0 20000 0 5685 0 18119 0 2033 0 251147 0 0 0 TAWFIC FARAH 268205 0 25000 0 7010 0 20000 0 8391 0 328606 0 0 0 BEVERLY HORI 288110 0 50000 0 2374 0 20000 0 18694 0 379178 0 0 0 KATHRYN KIMMEL 240251 0 25000 0 13113 0 20000 0 5081 0 303445 0 0 0 CYNTHIA SANDERS 178529 0 22000 0 2534 0 16140 0 5449 0 224652 0 0 0 LINDA SCHOLL 194242 0 0 0 83470 0 19254 0 5125 0 302091 0 0 0 RICHARD SUMMERS 149165 0 61500 0 50758 0 3795 0 10335 0 275553 0 0 0 PHILLIP YANTZER 186518 0 24000 0 941 0 17146 0 18531 0 247136 0 0 0 JOHN M KING 183949 0 22000 0 19528 0 18012 0 12055 0 255544 0 0 0 SUSAN SCHINDELAR 191074 0 20000 0 1802 0 17169 0 18034 0 248079 0 0 0 DONALD J FOSTER 188464 0 15000 0 941 0 14385 0 16534 0 235324 0 0 0 TIMOTHY N THOMAS 176894 0 13000 0 1630 0 20000 0 16507 0 228031 0 0 0 JOHN RADZINS 175000 0 13000 0 558 0 15040 0 0 0 203598 0 0 0 PART I, LINE 1A AS PROVIDED IN THE GIA EMPLOYEE HANDBOOK, GIA PROVIDES TO ALL EMPLOYEES ON A ONE-TIME BASIS, REIMBURSEMENT UP TO $100 OF THE EMPLOYEE'S HEALTH CLUB OR FITNESS PROGRAM MEMBERSHIP FEE. GIA WILL ONLY REIMBURSE THE EMPLOYEE ONCE RECEIPTS ARE SUBMITTED. THIS REMIMBURSEMENT IS AVAILABLE TO ALL EMPLOYEES. PART I, LINE 4A SEVERANCE PAYMENT IN THE AMOUNT OF $34,996 WAS MADE TO LINDA SCHOLL, VP OF HUMAN RESOURCES. THE PAYMENT WAS MADE BASED ON THE SEPARATION AGREEMENT. PART I, LINE 7 THE BOARD OF GOVERNORS HAS THE DISCRETION TO APPROVE SPECIAL AWARDS EACH YEAR IN RECOGNITION OF TEAM CONTRIBUTIONS TO ACHIEVING ORGANIZATIONAL GOALS. WITHIN EACH TEAM, AWARDS ARE ALLOCATED ACCORDING TO INDIVIDUAL EMPLOYEE PERFORMANCE MEASURES. THESE AMOUNTS ARE LISTED IN SCHEDULE J, PART II, COLUMN B(II). SUPPLEMENTAL INFORMATION PART III PART II, COLUMN B(III): THE 'OTHER REPORTABLE COMPENSATION' REPORTED IN COLUMN (B)(III) CONSISTS OF THE VALUE OF GROUP TERM LIFE INSURANCE IN EXCESS OF $50,000 AND A CASH-OUT OF EARNED PAID TIME OFF (BOTH OF WHICH WERE OFFERED TO ALL EMPLOYEES) AS WELL AS RELOCATION PAYMENTS AND SEVERANCE PAYMENTS MADE FOR CERTAIN EMPLOYEES AS PROVIDED IN THEIR EMPLOYMENT AGREEMENTS. SEE PART V 150238 0 SCHEDULE L, PART IV: THE INSTITUTE STRIVES TO MAINTAIN A BOARD OF GOVERNORS COMPOSED OF OUTSTANDING INDIVIDUALS WITH VARIED BACKGROUNDS WHO ARE ABLE TO CONTRIBUTE IMPORTANTLY TO THE ACCOMPLISHMENT OF THE INSTITUTE'S EXEMPT PURPOSES. THESE INCLUDE EXPERTS FROM THE FIELDS OF SCIENCE, ACADEMIA, FINANCE AND BUSINESS. THE INSTITUTE IS ALSO FORTUNATE TO HAVE BEEN ABLE TO RECRUIT A NUMBER OF OUTSTANDING EXPERTS (BOTH RETIRED AND ACTIVE) IN THE VARIOUS ASPECTS OF GEMS AND JEWELRY. THEREFORE, IT IS NOT SURPRISING THAT FIRMS ASSOCIATED WITH SOME OF THESE GOVERNORS HAVE PARTICIPATED IN THE INSTITUTE'S THREE EXEMPT ACTIVITIES PREVIOUSLY REPORTED TO AND APPROVED BY THE IRS: EDUCATION, RESEARCH, AND GEM LABORATORY ACTIVITIES. (IN ADDITION, A RELATIVELY SMALL PORTION OF THE TRANSACTIONS INVOLVED SALES OF GEMOLOGICAL INSTRUMENTS, BOOKS AND SUPPLIES WHICH HAVE BEEN REPORTED AS NONEXEMPT ACTIVITIES.) SUCH PARTICIPATION BY THESE FIRMS, HOWEVER, BEGAN BEFORE THE ELECTION OF THESE INDIVIDUALS TO THE BOARD OF GOVERNORS AND REPRESENTS A TINY FRACTION OF THE TOTAL ACTIVITIES REPORTED ON FORM 990. OBVIOUSLY, TO BAR FIRMS AFFILIATED WITH BOARD MEMBERS FROM UTILIZING THE SERVICES OF THE INSTITUTE THEY HAD PREVIOUSLY ENJOYED WOULD LIKELY DEPRIVE GIA OF THE SERVICES OF COMMITTED AND TALENTED LEADERS SUCH AS THESE. IN 2012, ONE FIRM ASSOCIATED WITH A MEMBER OF THE BOARD OF GOVERNORS RECEIVED A PAYMENT RELATED TO GEM LABORATORY SERVICES. THE PAYMENT WAS APPROVED IN ADVANCE BY MANAGEMENT AND DISINTERESTED MEMBERS OF THE BOARD OF GOVERNORS. THIS FIRM ALSO PAID FEES RELATED TO LABORATORY SERVICES TO GIA. THE FEES PAID TO GIA WERE THE SAME AS THOSE PAID BY ANY OTHER SIMILARLY-SITUATED CLIENT. THIS FIRM WAS A CLIENT OF THE GIA LABORATORY BEFORE THE AFFILIATED INDIVIDUAL BECAME A MEMBER OF THE BOARD OF GOVERNORS.GOVERNOR: EPHRAIM ZIONAFFILIATED FIRM: DEHRES LIMITED AGGREGATE AMOUNT PAID BY GIA: $125,000AGGREGATE AMOUNT PAID TO GIA: $25,238GENERAL COMMENTSMR. ZION IS THE MANAGING DIRECTOR OF DEHRES LTD. THE INSTITUTE UNDERSTANDS THAT MR. ZION HAS AN INTEREST IN DEHRES LTD. THROUGH SHARES HELD BY A FAMILY TRUST. THE FOREGOING TRANSACTIONS DID NOT INVOLVE A SHARING OF THE INSTITUTE'S REVENUE. X 21 215827 SALE OF COMP. PROP. 5 0 1 0 FORM 990, PART III, LINE 1, ORGANIZATION MISSION STATEMENT: THE INSTITUTE'S MISSION AND MOST SIGNIFICANT ACTIVITIES ARE (A) OPERATING A SCHOOL PROVIDING EDUCATION AND GRANTING DIPLOMAS IN GEMOLOGY AND RELATED AREAS; (B) PROTECTING THE PUBLIC FROM MISREPRESENTATION PERTAINING TO GEMS, DETERRING GEM THEFT, ASSISTING IN THE RECOVERY OF STOLEN PROPERTY AND PROSECUTION OF CRIMINALS, AND PROMOTING STATE-OF-THE-ART RESEARCH INTO THE TECHNIQUES BY WHICH GEMS ARE MODIFIED TECHNOLOGICALLY OR MANUFACTURED SYNTHETICALLY AND AS IMITATIONS OF GEMS; AND (C) SUPPORTING, PERFORMING, AND PUBLISHING SCIENTIFIC RESEARCH AND ANALYSIS RELATED TO GEMS AND GEMOLOGY AND LEARNING IN RELATED FIELDS. FORM 990, PAGE 1, ITEM L, YEAR OF FORMATION: THE GEMOLOGICAL INSTITUTE OF AMERICA WAS ESTABLISHED IN 1931 BY ROBERT M. SHIPLEY WHO INTRODUCED CORRESPONDENCE COURSES IN THE SAME YEAR. SUBSEQUENTLY, GIA CORPORATIONS WERE FORMED IN OHIO AND IN CALIFORNIA. THE CURRENT GEMOLOGICAL INSTITUTE OF AMERICA, INC. ("GIA" OR "THE INSTITUTE") IS A CALIFORNIA PUBLIC BENEFIT CORPORATION, WHICH IS THE SUCCESSOR TO THE CALIFORNIA CORPORATION INITIALLY INCORPORATED IN 1982, WHICH IN TURN IS THE SUCCESSOR TO THE OHIO CORPORATION INCORPORATED IN 1943. SIGNIFICANT ACTIVITIES: FORM 990, PAGE 1, LINE 1, ORGANIZATION MISSION STATEMENT AND MOST GIA IS THE WORLD'S LARGEST AND MOST RESPECTED NONPROFIT INSTITUTE OF GEMOLOGICAL RESEARCH AND LEARNING. THE INSTITUTE'S MISSION AND MOST SIGNIFICANT ACTIVITIES ARE (A) OPERATING A SCHOOL PROVIDING EDUCATION AND GRANTING DIPLOMAS IN GEMOLOGY AND RELATED AREAS; (B) PROTECTING THE PUBLIC FROM MISREPRESENTATION PERTAINING TO GEMS, DETERRING GEM THEFT, ASSISTING IN THE RECOVERY OF STOLEN PROPERTY AND PROSECUTION OF CRIMINALS, AND PROMOTING STATE-OF-THE-ART RESEARCH INTO THE TECHNIQUES BY WHICH GEMS ARE MODIFIED TECHNOLOGICALLY OR MANUFACTURED SYNTHETICALLY AND AS IMITATIONS OF GEMS; AND (C) SUPPORTING, PERFORMING, AND PUBLISHING SCIENTIFIC RESEARCH AND ANALYSIS RELATED TO GEMS AND GEMOLOGY AND LEARNING IN RELATED FIELDS. GIA OFFERS A COMPREHENSIVE GEMOLOGY CURRICULUM TAUGHT BY A FULL-TIME, PROFESSIONAL FACULTY TO REGULARLY ENROLLED STUDENTS AT ITS ON-CAMPUS FACILITIES IN CARLSBAD, CALIFORNIA AND NEW YORK CITY. GIA ALSO OFFERS EXTENSIVE DISTANCE EDUCATION. GIA'S RESEARCHERS UTILIZE SOPHISTICATED ANALYTICAL TECHNIQUES AND EQUIPMENT TO ADVANCE THE SCIENCE OF GEMOLOGY, AND TO DETECT SYNTHETIC AND ALTERED GEMS. ITS LIBRARY AND QUARTERLY PUBLICATION, GEMS & GEMOLOGY, COLLECT AND DISSEMINATE RESEARCH ON GEMS. THE GIA'S LABORATORY PROTECTS THE PUBLIC FROM MISREPRESENTATION ABOUT GEMS, DETERS GEM THEFT, AND HELPS LAW ENFORCEMENT BY TRACING STOLEN GEMS, WHILE PROMOTING STATE-OF-THE-ART RESEARCH. IN 2013, THE ETHISPHERE INSTITUTE, A LEADING INTERNATIONAL ORGANIZATION DEDICATED TO THE CREATION, ADVANCEMENT AND SHARING OF BEST PRACTICES IN BUSINESS ETHICS, NAMED GIA AS ONE OF THE "WORLD'S MOST ETHICAL COMPANIES". FORM 990, PART III, LINE 4A: EDUCATION: GIA OFFERS A COMPREHENSIVE GEMOLOGY CURRICULUM AT THE INSTITUTE'S CALIFORNIA AND NEW YORK CAMPUSES, AND THROUGH INTERNATIONAL SUBSIDIARIES IN INDIA, THAILAND, HONG KONG, ENGLAND, SOUTH AFRICA, BOTSWANA, DUBAI, AND TAIWAN, AND LICENSEES IN ITALY, JAPAN, KOREA, AND RUSSIA. DISTANCE EDUCATION COURSES ARE DISTRIBUTED DOMESTICALLY AND INTERNATIONALLY IN A VARIETY OF LANGUAGES. IN 2012, TOTAL ENROLLMENTS WERE 16,209, COMPRISING 3,352 ON-CAMPUS, AND 12,857 DISTANCE-EDUCATION ENROLLMENTS. GIA WAS AWARDED THE SCHOOL OF EXCELLENCE AWARD FOR 2011-2012 BY THE ACCREDITING COMMISSION OF CAREER SCHOOLS AND COLLEGES (ACCSC). ONLY 17 SCHOOLS IN THE COUNTRY QUALIFIED FOR THIS HIGH HONOR. GIA'S EDUCATIONAL OFFERINGS COVER THE GAMUT OF GEMOLOGY SUBJECTS, INCLUDING, BUT NOT LIMITED TO: (A) THE USE OF GEMOLOGICAL INSTRUMENTS, (B) THE OPTICAL AND PHYSICAL PROPERTIES OF DIAMONDS, GEMSTONES, PEARLS AND OTHER NATURAL ORGANIC GEM MATERIALS, (C) SYNTHETIC DIAMONDS AND DIAMOND SIMULANTS, (D) DETECTION OF FRACTURE-FILLED DIAMONDS AND SYNTHETIC DIAMONDS, (E) DETERMINATION OF COLOR, CLARITY, CUT, AND CARAT WEIGHT OF DIAMONDS, (F) APPLICATION OF FTC GUIDELINES FOR JEWELRY TRANSACTIONS, (G) DETECTION OF SYNTHETIC, TREATED, IMITATION OR ASSEMBLED COLORED GEM MATERIALS, AND (H) DETECTION OF CULTURED, IMITATION, ASSEMBLED AND TREATED PEARLS. A GRADUATE GEMOLOGIST (G.G.) DIPLOMA FROM GIA IS RECOGNIZED AROUND THE GLOBE AS A KEY CREDENTIAL IN THE GEMOLOGICAL WORLD. IN 2003, IN RESPONSE TO A GROWING NEED FOR QUALITY SCIENCE COURSES FOR CHILDREN, GIA CREATED THE JUNIOR GEMOLOGIST PROGRAM. THE JUNIOR GEMOLOGIST PROGRAM TEACHES GEMOLOGY, GEOLOGY AND MINERALOGY TO LOCAL STUDENTS AND YOUTH GROUPS, WITH INSTRUCTION PROVIDED BY THE INSTITUTE'S INSTRUCTORS AND MEMBERS OF THE GEM AND JEWELRY INDUSTRY. THE MATERIAL IS PRESENTED IN AN INTERACTIVE AND SCIENTIFIC WORKSHOP THAT INCLUDES HANDS-ON TRAINING WITH GEMOLOGICAL INSTRUMENTS AND EQUIPMENT. IN 2012, APPROXIMATELY 4,698 STUDENTS ATTENDED THE JUNIOR GEMOLOGIST PROGRAM. GIA HOSTS A JEWELRY CAREER FAIR AND OPEN HOUSE AT ITS CAMPUS IN CALIFORNIA ON AN ANNUAL BASIS. THE EVENT IS FREE AND OPEN TO THE PUBLIC. AS THE JEWELRY INDUSTRY'S LARGEST JOB FAIR, THE EVENT ALWAYS ATTRACTS THE INDUSTRY'S TOP RETAILERS, MANUFACTURERS, LABORATORIES AND WHOLESALERS INTERESTED IN HIRING GIA STUDENTS AND GRADUATES. IN 2012, GIA ALSO HOSTED A JEWELRY CAREER FAIR IN NEW YORK. APPROXIMATELY 1,300 INDIVIDUALS ATTENDED THE CAREER FAIR AND OPEN HOUSE EVENTS, 500 IN CALIFORNIA AND 800 IN NEW YORK. THE MISSION OF THE INSTITUTE'S RICHARD T. LIDDICOAT GEMOLOGICAL LIBRARY AND INFORMATION CENTER IN CARLSBAD, CALIFORNIA IS TO CONTINUE AS THE WORLD'S PREMIER RESOURCE FOR INFORMATION IN THE FIELDS OF GEM AND JEWELRY-RELATED STUDIES. AS SUCH, THE INSTITUTE PROMOTES THE USE OF ITS RESOURCES FOR EDUCATION AND RESEARCH BY THE PUBLIC, THE GEM AND JEWELRY INDUSTRY, AND THE INSTITUTE'S STUDENTS, FACULTY AND ALUMNI. THE INSTITUTE'S LIBRARY HOUSES THE WORLD'S LARGEST COLLECTION OF DIAMOND, GEM AND JEWELRY RESOURCE MATERIALS. WHETHER BY PHONE, E-MAIL OR IN PERSON, THE LIBRARY STAFF SERVES SCIENTISTS, JEWELERS, GEMOLOGISTS AND STUDENTS FROM EVERY CORNER OF THE GLOBE. THE EXPERT LIBRARY STAFF DRAWS UPON A GROWING COLLECTION OF OVER 13,000 VOLUMES IN ITS CIRCULATING COLLECTION, 25,000 VOLUMES IN THE RENOWNED CARTIER RARE BOOK REPOSITORY AND ARCHIVES, OVER 100,000 PHOTOGRAPHIC IMAGES, 1,300 VIDEOS/DVDS, APPROXIMATELY 700 JOURNAL AND MAGAZINE TITLES, 200 CD-ROMS AND 120 AUDIO CDS TO PROVIDE READY REFERENCE IN THE FIELDS OF GEMOLOGY AND JEWELRY. THE INSTITUTE'S MUSEUM ALSO EDUCATES THE PUBLIC ON GEMS AND GEMOLOGY, DISPLAYING CUT GEMS, MINERAL SPECIMENS AND JEWELRY. THE MUSEUM HAS HOSTED A SERIES OF THEMED EXHIBITS. IN 2012, 6,116 GUESTS VISITED AND TOURED THE MUSEUM THROUGHOUT THE YEAR. AS DISCUSSED BELOW, THE INSTITUTE PUBLISHES "GEMS & GEMOLOGY," A PEER REVIEWED JOURNAL THAT EDUCATES ITS READERSHIP ABOUT THE LATEST DISCOVERIES IN GEMOLOGY. FORM 990, PART III, LINE 4B: LABORATORY: THE MISSION OF THE INSTITUTE'S LABORATORY IS TO PROTECT THE PUBLIC FROM MISREPRESENTATION PERTAINING TO GEMS (WHETHER INNOCENT, NEGLIGENT OR INTENTIONAL), TO DETER GEM THEFT, TO ASSIST IN RECOVERY OF STOLEN PROPERTY AND PROSECUTION OF CRIMINALS, AND TO PROMOTE STATE-OF-THE-ART RESEARCH INTO THE TECHNIQUES BY WHICH GEMS ARE MODIFIED TECHNOLOGICALLY OR MANUFACTURED SYNTHETICALLY. THE FBI'S JEWELRY AND GEM PROGRAM HAS DESIGNATED GIA AS A PARTNER LISTED ON THE FBI WEBSITE IN COMBATING GEM THEFT. IN 2012, THE LABORATORY FLAGGED 1,323 STOLEN GEMSTONES IN ITS DATABASE, AND RECOVERED 43 GEMSTONES IN CASES IN WHICH STONES WERE RESUBMITTED TO THE LABORATORY AFTER HAVING BEEN STOLEN. GIA ALSO REGULARLY ASSISTS OTHER GOVERNMENT AGENCIES. IN 2012, GIA ISSUED 9 DIAMOND GRADING REPORTS FOR LAW ENFORCEMENT AGENCIES. PER REQUEST OF THE FBI, IN 2012, GIA OFFERED A TWO-WEEK GEMOLOGY TRAINING SEMINAR TO 10 FBI SPECIAL AGENTS, 7 SPECIAL AGENTS FROM IMMIGRATION AND CUSTOMS ENFORCEMENT, AND LOCAL LAW ENFORCEMENT OFFICERS FROM HOUSTON AND MIAMI. THE PURPOSE OF THE TRAINING SEMINAR WAS TO ASSIST THE LAW ENFORCEMENT OFFICERS IN THE INVESTIGATION AND PROSECUTION OF JEWELRY RELATED CRIMES. FURTHERMORE, GIA PROVIDED SUPPORT AND INFORMATION TO THE DEPARTMENT OF HOMELAND SECURITY. THE LABORATORY FULFILLS ITS MISSION BY EXAMINING AND CLASSIFYING INDIVIDUAL GEM MATERIALS SUBMITTED TO THE GIA LABORATORY AND ITS INTERNATIONAL SUBSIDIARIES' LABORATORIES. DIAMONDS AND SYNTHETIC DIAMONDS ARE IDENTIFIED AND GRADED, WITH REPORTS ISSUED ON THEIR PRECISE IDENTIFYING FEATURES AND WITH QUALITY ASSESSMENTS ON THE 4CS: COLOR, CLARITY, CUT AND CARAT WEIGHT. COLORED GEMSTONES, SYNTHETIC COLORED STONES, PEARLS AND CULTURED PEARLS ARE IDENTIFIED, WITH REPORTS ISSUED UPON CLIENT REQUEST. THE DISTINGUISHING CHARACTERISTICS AND FEATURES OF A GIVEN GEM ARE UNIQUE TO THAT GEM IN MUCH THE SAME WAY A FINGERPRINT IS UNIQUE TO AN INDIVIDUAL PERSON. ONCE A GEM HAS BEEN SUBMITTED FOR EXAMINATION, ITS CHARACTERISTICS AND FEATURES ARE RECORDED FOR FUTURE REFERENCE IN CASE IT IS EVER RESUBMITTED, EITHER IN THE NORMAL COURSE OF EVENTS OR IN QUESTIONABLE CIRCUMSTANCES, SUCH AS WITH LOST OR STOLEN ITEMS. ADDITIONALLY, IF REQUESTED BY THE CLIENT, AN IDENTIFICATION CODE CAN BE LASER INSCRIBED UPON THE GEM. THE SUBSTANTIAL AND CONTINUOUS VOLUME OF GEM MATERIALS THAT ARE SUBMITTED FOR EXAMINATION, TOGETHER WITH THE LARGE COLLECTION OF COMPARISON GEMS ACQUIRED BY GIA, CONSTITUTE AN INVALUABLE DATABASE FOR THE RESEARCH AND PUBLIC SERVICE CONDUCTED BY THE INSTITUTE. TO MAKE THIS PUBLIC SERVICE POSSIBLE, GIA CHARGES RELATIVELY MODEST FEES THAT VARY BY THE TYPE AND SIZE OF THE GEM MATERIAL. IT SHOULD BE NOTED THAT GIA DOES NOT APPRAISE ANY GEM MATERIALS OR OTHERWISE ESTABLISH THEIR MARKET VALUE. COMMERCE IN GEMS HAS BECOME MORE GLOBAL OVER THE PAST DECADE, WITH THE RESULT THAT MANY GEM MATERIALS ARE SOLD BY FOREIGN GEM OWNERS OR DEALERS BUT ULTIMATELY FIND THEIR WAY TO THE U.S. MARKET, EITHER THROUGH WHOLESALE DISTRIBUTION OR FUTURE RESALE. MOST DIAMONDS PURCHASED IN THE U.S. HAVE BEEN MINED AND PROCESSED OUTSIDE OF THIS COUNTRY. SOME PROPORTION OF THOSE DIAMONDS HAVE HISTORICALLY NOT BEEN SUBMITTED TO GIA'S LABORATORY BECAUSE OF THE GEOGRAPHIC DISTANCE BETWEEN GIA'S LABORATORY FACILITIES IN CALIFORNIA AND NEW YORK AND THE FAR FLUNG LOCATIONS OF MINES AND DEALERS. TO ENHANCE ITS ABILITY TO PURSUE THE MISSION OF PROTECTING THE GEM PURCHASING PUBLIC, DETERRING THEFT, AND ASSISTING IN RECOVERY OF STOLEN PROPERTY AND PROSECUTION OF CRIMINALS, GIA OPERATES LABORATORIES THROUGH ITS BRANCHES AND WHOLLY-OWNED SUBSIDIARIES IN BOTSWANA, HONG KONG, INDIA, ISRAEL, JAPAN, SOUTH AFRICA, AND THAILAND; AND GIA OPERATES AN INTAKE OFFICE OFFERING LOGISTICAL SUPPORT THROUGH ITS WHOLLY-OWNED SUBSIDIARY IN DUBAI. FORM 990, PART III, LINE 4C: RESEARCH & PUBLICATIONS: THE INSTITUTE'S RESEARCHERS UTILIZE SOPHISTICATED ANALYTICAL TECHNIQUES AND SCIENTIFIC EQUIPMENT TO ADVANCE THE SCIENCE OF GEMOLOGY, INCLUDING DETECTION OF SYNTHETIC GEMS, CULTURED PEARLS AND TREATED NATURAL GEMS. THE MISSION OF THE RESEARCH DEPARTMENT IS TO (1) CHARACTERIZE THE GEMOLOGICAL PROPERTIES OF GEM MATERIALS AND DEVELOP PRACTICAL WAYS TO IDENTIFY THEM; (2) UNDERSTAND THE CONDITIONS OF GEMSTONE FORMATION IN THE EARTH, AS WELL AS THE CONDITIONS OF GEM TREATMENT AND SYNTHESIS IN THE LABORATORY, AS A FURTHER BASIS FOR DEVELOPING MEANS OF GEM IDENTIFICATION; (3) INVESTIGATE THE FACTORS THAT ARE RESPONSIBLE FOR THE APPEARANCE OF DIAMONDS AND OTHER GEM MATERIALS, SO AS TO ESTABLISH METHODS TO EVALUATE THEIR QUALITY; AND (4) DESIGN AND IMPROVE INSTRUMENTS FOR GEM STONE TESTING. THE INSTITUTE IS THE WORLD LEADER IN RESEARCHING THE METHODS BY WHICH GEM MATERIALS CAN BE ENHANCED IN COLOR OR CLARITY OR SYNTHESIZED IN A LABORATORY. THIS RESEARCH HELPS PROTECT THE PUBLIC FROM POSSIBLE MISREPRESENTATIONS PERTAINING TO GEM MATERIALS. THE INSTITUTE ACTS AS A CONSUMER ADVOCATE TO ENSURE THAT CONSUMERS, ALONG WITH RETAILERS AND WHOLESALERS, ARE FULLY APPRISED OF THE TRUE CHARACTER - NATURAL, ENHANCED, OR SYNTHETIC - OF ANY SPECIFIC GEM. SINCE 2011, GIA HAS PARTICIPATED IN AN AGREEMENT WITH UNITED STATES CUSTOMS AND BORDER PROTECTION TO COLLABORATE ON ANALYSES OF GEMSTONES IN ORDER TO DETERMINE THEIR IDENTITY (NATURAL, TREATED-NATURAL OR SYNTHETIC), INDICATIONS OF COUNTRY OF ORIGIN, AND DEVELOP A DATABASE FOR U.S. CUSTOMS AND BORDER PROTECTION THAT WILL FACILITATE TRADE AND LAW ENFORCEMENT. THIS COLLABORATION HELPS TO LESSEN THE BURDENS OF GOVERNMENT. TO DISSEMINATE THEIR FINDINGS, GIA RESEARCHERS SPEAK AT SEMINARS, POST DEVELOPMENTS ONLINE ON THE GIA RESEARCH WEB SITE, AND PUBLISH FREQUENTLY IN SCHOLARLY TEXTS AND JOURNALS, INCLUDING "GEMS & GEMOLOGY," GIA'S QUARTERLY SCIENTIFIC PUBLICATION. "GEMS & GEMOLOGY," WHICH HAS BEEN IN CONTINUOUS PUBLICATION FOR MORE THAN 75 YEARS, PROVIDES INFORMATION ON NEW GEM MATERIALS, GEM LOCALITIES, TREATMENT AND SYNTHESIS TECHNIQUES, AND IDENTIFICATION METHODS. THE JOURNAL KEEPS STUDENTS AND PROFESSIONALS ALIKE UP-TO-DATE ON THE MOST CRITICAL TOPICS IN GEMOLOGY. IN RECENT YEARS, GIA HAS PUBLISHED THREE COMPENDIUMS OF ARTICLES FROM GEMS & GEMOLOGY, ON SYNTHETIC, COLORED AND TREATED DIAMONDS. THERE IS A CONSTANT DEMAND FOR BACK ISSUES BY STUDENTS, PROFESSIONALS AND HOBBYISTS RESEARCHING NUMEROUS GEMOLOGICAL SUBJECTS. IN ADDITION, GIA SUMMARIZES TECHNICAL ARTICLES PUBLISHED BY GIA RESEARCHERS IN GEMS & GEMOLOGY FOR REPUBLICATION IN TRADE JOURNALS NATIONALLY AND INTERNATIONALLY, SO THE INFORMATION CAN BE BROADLY DISSEMINATED. SINCE NOVEMBER 2008, THE JOURNAL HAS BEEN AVAILABLE ONLINE AS WELL AS IN PRINT. IN 2013, GIA MADE ALL OF ITS BACK ISSUES OF GEMS & GEMOLOGY AVAILABLE ONLINE AT NO COST. SINCE OCTOBER 2009, STAFF MEMBERS AT GEMS & GEMOLOGY HAVE PRODUCED A MONTHLY ELECTRONIC NEWSLETTER CALLED THE G&G EBRIEF, WITH SHORT, ORIGINAL REPORTS FROM GIA AND OTHER RESEARCHERS ABOUT THE NEW DEVELOPMENTS IN THE FIELD. PUBLICATION INFORMATION FOR THE YEAR 2012: ISSUES DISTRIBUTED TO SUBSCRIBERS: 8,415 CURRENT ISSUES ORDERED: 1,102 BACK ISSUES ORDERED: 1,749 TOTAL ISSUES: 11,266 FORM 990, PART VI, SECTION B, LINE 11 THE BOARD OF GOVERNORS DELEGATES THE DETAILED REVIEW AND APPROVAL OF FORM 990 TO A 990 REVIEW TEAM. THE 990 REVIEW TEAM CONSISTS OF: GIA PRESIDENT / CEO AND GOVERNOR; ITS VICE PRESIDENT AND CHIEF FINANCIAL OFFICER; ITS VICE PRESIDENT AND CHIEF MARKETING OFFICER; GIA'S OUTSIDE COUNSEL SPECIALIZING IN NON-PROFIT AND TAX MATTERS; DIRECTOR OF GLOBAL CORPORATE COMPLIANCE; AND GLOBAL TAX DIRECTOR OF GIA. THE 990 REVIEW TEAM SCHEDULES A MEETING WITH THE FIRM THAT PREPARES THE FORM 990 TO CONDUCT A DETAILED REVIEW. THE FIRM RESPONDS TO ANY OUTSTANDING QUESTIONS OR CONCERNS RAISED BY THE 990 REVIEW TEAM. ONCE THE REVIEW TEAM COMPLETES ITS DETAILED REVIEW, THE FORM 990 IS AVAILABLE TO THE BOARD OF GOVERNORS PRIOR TO ITS FILING WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C THE INSTITUTE REGULARLY AND CONSISTENTLY MONITORS AND ENFORCES COMPLIANCE WITH ITS CONFLICT OF INTEREST POLICIES THROUGH ANNUAL CIRCULATION OF A CONFLICT OF INTEREST QUESTIONNAIRE, WHICH IS COMPLETED AND SIGNED BY ALL MEMBERS OF THE BOARD OF GOVERNORS, OFFICERS, AND MEMBERS OF EXECUTIVE MANAGEMENT. IN ADDITION, GIA REQUIRES ALL EMPLOYEES (INCLUDING THOSE OF GIA AND ITS INTERNATIONAL AFFILIATES) TO REVIEW ITS CODE OF CONDUCT, AS IT MAY BE AUGMENTED BY GIA FROM TIME TO TIME, AND TO ACKNOWLEDGE BY SIGNATURE ADHERENCE TO ITS ETHICAL STANDARDS, INCLUDING ITS CONFLICT OF INTEREST POLICIES, AS A CONDITION OF EMPLOYMENT. THE LEGAL DEPARTMENT REVIEWS CONTRACTUAL RELATIONSHIPS ENTERED INTO BY THE ORGANIZATION AND IS RESPONSIBLE FOR MONITORING CONFLICTS OF INTEREST AS REPORTED THROUGH DISCLOSURES AND BY OTHER MEANS. FURTHER, IT IS INCUMBENT UPON ALL OF THE AFOREMENTIONED PARTIES TO DISCLOSE ANY CONFLICTS OF INTEREST IN THE COURSE OF THE YEAR. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF GOVERNORS EXECUTIVE COMMITTEE MEETS ANNUALLY IN NOVEMBER TO REVIEW THE OFFICER COMPENSATION AND TO SET THE PAY RATE FOR THE SUBSEQUENT YEAR. GIA HAS RETAINED THE SERVICES OF THE HAY GROUP, INTERNATIONAL COMPENSATION AND BENEFITS CONSULTANTS, WHICH DISTRIBUTES PERIODIC MARKET PAY COMPARISONS OF COMPARABLE JOBS TO THOSE OF GIA OFFICERS. THIS INFORMATION IS PROVIDED TO THE BOARD EXECUTIVE COMMITTEE FOR REVIEW AND USE. IN THE INTERIM YEARS BETWEEN COMPREHENSIVE MARKET STUDIES, GIA OBTAINS SUCH MARKET DATA AS AVERAGE MERIT INCREASES FROM THE HAY GROUP AND ALSO TAKES THE CPI INTO CONSIDERATION. FORM 990, PART VI, SECTION C, LINE 19 GIA'S EMPLOYEE CODE OF CONDUCT, WHICH INCLUDES A SECTION ON CONFLICTS OF INTEREST, IS POSTED ON GIA'S WEBSITE. THIS CODE GOVERNS EMPLOYEES OF GIA AND ITS GLOBAL SUBSIDIARIES. FINANCIAL STATEMENTS ARE INCORPORATED INTO THE FORM 990, WHICH, OF COURSE, IS AVAILABLE TO THE PUBLIC. THE INSTITUTE'S GOVERNING DOCUMENTS ARE ALSO AVAILABLE TO THE PUBLIC UPON REQUEST. FORM 990, PART VII, SECTION A: IN 2012 BOARD MEMBERS RECEIVED A STIPEND BASED ON THE NUMBER OF MEETINGS THEY ATTENDED. HOWEVER, EACH GOVERNOR HAS THE OPTION TO DECLINE THIS STIPEND. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 9: UNREALIZED FOREIGN EXCHANGE LOSS -149,193. PENSION LIABILITY ADJUSTMENT -2,958,846. EQUITY EARNINGS OF SUBS 5,191,668. DIVIDEND FROM FOREIGN SUB -321,148. 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THESE RELATED ORGANIZATIONS ARE NOT TAX EXEMPT UNDER SECTION 501(C)(3) OF THE CODE, BECAUSE THEY ARE NOT LOCATED OR OPERATING IN THE UNITED STATES. HOWEVER, IF THESE ORGANIZATIONS WERE TAX EXEMPT UNDER SECTION 501(C)(3) OF THE CODE WITH THE SAME EXEMPT PURPOSES AS GIA, THESE ORGANIZATIONS WOULD HAVE NO UNRELATED BUSINESS INCOME, SINCE ALL OF THEIR INCOME AND ACTIVITIES ARE IDENTICAL IN CHARACTER TO GIA'S TAX-EXEMPT INCOME AND ACTIVITIES. ACCORDINGLY, THESE ROYALTY PAYMENTS ARE NOT TREATED AS UNRELATED BUSINESS INCOME FOR GIA UNDER SECTION 512(B)(13) OF THE CODE. THE TRANSACTIONS REPORTED BETWEEN GIA AND THE RELATED ORGANIZATIONS LISTED ON LINES 20-23 ARE ASSOCIATED WITH THE PROVISION OF GRADING AND MANAGEMENT SERVICES BY GIA. THESE GRADING SERVICES ARE PERFORMED IN GIA'S ORDINARY COURSE OF BUSINESS AS DESCRIBED IN SCHEDULE O, PART III, LINE 4B.