2012-11-14T13:53:50-06:00 2011-12-31 135381590 BDO USA LLP 7101 WISCONSIN AVE SUITE 800 BETHESDA MD 208144827 990 2011-01-01 760742496 SOUNDEXCHANGE INC SOUN 2026405858 733 10TH STREET NW 10TH FLOOR WASHINGTON DC 20001 ANJULA SINGH 2026405858 2012-11-14 1 JOYCE M UNDERWOOD P00022361 3016544900 2011 2016-02-24 21:20:13Z X MICHAEL J HUPPE 733 10TH STREET NW 10TH FLOOR WASHINGTON DC 20001 20984008 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 96 0 0 0 0 0 20090413 20386274 868179 597734 0 0 20958592 20984008 0 0 0 0 6014939 6408620 0 0 0 14906077 14626582 20921016 21035202 37576 -51194 305842704 369449828 304786523 368393647 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 FY2011, 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. 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 COLLECTED ROYALTIES FROM OVER 1,000 LICENSEES AND DISTRIBUTED ROYALTIES TO OVER 22,000 SOUND RECORDING COPYRIGHT OWNERS AND FEATURED ARTISTS. SOUNDEXCHANGE ALSO DISTRIBUTED ROYALTIES TO THE INDEPENDENT ADMINISTRATORS. 0 0 0 1 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 0 1 16272 0 1 96 1 0 0 0 0 0 0 X 18 18 0 0 0 0 1 1 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 TUCKER MCCRADY 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 PATRICIA POLACH 1.00 X 0 0 0 KIM ROBERTS-HEDGPETH 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 MITCH BAINWOL 1.00 X 0 0 0 MICHAEL J HUPPE 40.00 X 600862 0 16723 JONATHAN BENDER 40.00 X 86836 0 75 COLIN RUSHING 40.00 X 236351 0 17455 ANJULA SINGH 40.00 X 226672 0 10822 RYAN LEHNING 40.00 X 145273 0 11897 BRYAN CALHOUN 40.00 X 194386 0 9610 BRADLEY PRENDERGAST 40.00 X 165210 0 9968 CHRIS DEAN 40.00 X 159327 0 12377 WAJAHAT QURESHI 40.00 X 156123 0 2961 JOHN SIMSON 40.00 X 317401 0 0 BARRIE KESSLER 40.00 X 312312 0 0 2600753 0 91888 10 1 1 0 ACUMEN SOLUTIONS INC 1660 INTERNATIONAL DR MCLEAN VA 22102 IT CONSULTING 2236887 JENNER & BLOCK LLP 353 N CLARK ST CHICAGO IL 60654 LEGAL 748047 RANDSTAD PO BOX 7247-6655 PHILADELPHIA PA 19170 TEMPORARY HELP 706696 HIRESTRATEGY 1875 EXPLORER STREET SUITE 520 RESTON VA 20190 TEMPORARY HELP 452302 COGNIZANT TECHNOLOGY SOLUTIONS 24721 NETWORK PLACE CHICAGO IL 60673 IT CONSULTING 432395 11 ROYALTY COLLECTION 900099 19793281 19793281 COST RECOVERY FEES 900099 592993 592993 20386274 597734 597734 20984008 20386274 0 597734 1195797 4246339 119004 484949 362531 431714 113427 180630 256880 3281258 339764 2442578 1856599 343000 89750 14537 4202352 100304 973789 21035202 100 100 55335181 75976759 244380 539633 12313129 8430322 3314740 3882807 238668084 282306935 8280219 6743594 305842704 369449828 2626591 4250835 734686 715814 301425246 363426998 304786523 368393647 X 1056181 1056181 1056181 1056181 305842704 369449828 X -51194 51194 X X 0 1 0 X 0 1 0 0 1313565 544800 768765 1251572 395282 856290 9747992 7490240 2257752 3882807 CAPITAL LEASES PAYABLE 394159 FUNDS HELD IN AGENCY (SEE PART XIV) 363032839 363426998 20984008 21035202 -51194 51194 51194 0 20727128 0 20727128 256880 256880 20984008 20727128 -51194 -51194 20778322 256880 256880 21035202 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: UNDER ASC 740-10, ACCOUNTING FOR UNCERTAINTY 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, 2011 AND 2010, RESPECTIVELY. 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 2008. PART XIII, LINE 2D - OTHER ADJUSTMENTS: NET UNREALIZED (GAIN) LOSS ON INVESTMENTS -51,194. 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 2011, BUT COLLECTED AFTER DECEMBER 31, 2011. THE FUNDS HELD IN AGENCY BALANCE OF $363,032,839 AT DECEMBER 31, 2011 INCLUDED A $68.7 MILLION ACCRUAL FOR SUCH ROYALTIES. X X 1 1 X X X 1 0 0 MICHAEL J HUPPE 525000 0 75000 0 862 0 11750 0 4973 0 617585 0 0 0 COLIN RUSHING 215664 0 20000 0 687 0 10323 0 7132 0 253806 0 0 0 ANJULA SINGH 201035 0 25000 0 637 0 9718 0 1104 0 237494 0 0 0 RYAN LEHNING 136994 0 7500 0 779 0 6850 0 5047 0 157170 0 0 0 BRYAN CALHOUN 173765 0 20000 0 621 0 8634 0 976 0 203996 0 0 0 BRADLEY PRENDERGAST 160210 0 5000 0 0 0 5885 0 4083 0 175178 0 0 0 CHRIS DEAN 153032 0 5750 0 545 0 7472 0 4905 0 171704 0 0 0 WAJAHAT QURESHI 155727 0 0 0 396 0 1078 0 1883 0 159084 0 0 0 JOHN SIMSON 0 0 0 0 317401 0 0 0 0 0 317401 0 0 0 BARRIE KESSLER 0 0 0 0 312312 0 0 0 0 0 312312 0 0 0 PART I, LINE 1A OUR PRESIDENT IS PERMITTED SPOUSAL COMPANION TRAVEL REIMBURSEMENT UP TO $5,000 ANNUALLY. WHERE APPLICABLE, THE TAX ON SHORT-TERM AND LONG-TERM DISABILITY IS GROSSED UP. PART I, LINE 4A JOHN SIMSON WAS PAID $317,401 IN SEVERANCE PAYMENTS IN 2011, BASED ON SERVICE TO THE ORGANIZATION AND SUBJECT TO TERMS AND CONDITIONS THAT ARE CONSISTENT WITH INDUSTRY PRACTICE. BARRIE KESSLER WAS PAID $312,312 IN SEVERANCE PAYMENTS IN 2011, 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 FY2011, 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 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 COLLECTED ROYALTIES FROM OVER 1,000 LICENSEES AND DISTRIBUTED ROYALTIES TO OVER 22,000 SOUND RECORDING COPYRIGHT OWNERS AND FEATURED ARTISTS. SOUNDEXCHANGE ALSO DISTRIBUTED ROYALTIES TO THE INDEPENDENT ADMINISTRATORS. FORM 990, PART VI, SECTION A, LINE 6 SOUNDEXCHANGE DOES NOT HAVE STOCKHOLDERS BUT IS GOVERNED BY AN 18 MEMBER BOARD OF DIRECTORS, 9 REPRESENTING THE INTERESTS OF SOUND RECORDING COPYRIGHT OWNERS, AND 9 REPRESENTING THE INTERESTS OF RECORDING ARTISTS. FORM 990, PART VI, SECTION A, LINE 7A THE SOUNDEXCHANGE BOARD IS COMPOSED OF 18 DIRECTORS, 9 REPRESENTING THE INTERESTS OF SOUND RECORDING COPYRIGHT OWNERS AND 9 REPRESENTING THE INTERESTS OF RECORDING ARTISTS. SOME DIRECTORS ARE APPOINTED BY OTHER ORGANIZATIONS AND SOME SIT ON THE BOARD BY VIRTUE OF THEIR POSITIONS WITHIN SOME ORGANIZATIONS. IN ADDITION, MANY OF THE DIRECTORS ARE SELECTED BY THEIR PEERS. 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 PRESIDENT'S CONTRACT IS PREPARED AND APPROVED BY THE BOARD. THE COO, GENERAL COUNSEL AND SVP OF FINANCE (THE OTHER OFFICERS) SALARIES ARE REVIEWED BY THE FINANCE COMMITTEE AND ARE RECOMMENDED TO THE FULL BOARD FOR APPROVAL AS PART OF THE THE ANNUAL BUDGET APPROVAL 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. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED GAINS ON INVESTMENTS: 51,194. 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.