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UTILIZED THE SERVICES OF TWO GOVERNMENT AFFAIRS FIRMS DURING THE YEAR ENDED JUNE 30, 2012. AS PART OF THE SERVICES PROVIDED, THE GOVERNMENT AFFAIRS FIRMS INCURRED $536,318 OF LOBBYING EXPENDITURES. FURTHER, TEN PERCENT OF JAMES HEDLUND'S TIME WAS ATTRIBUTED TO LOBBYING ACTIVITIES AS REPORTED ON FORM LD1. AMOUNTS REPORTED ON LD1 ARE NOT INCLUDED ON SCHEDULE C PART II-B, BUT ARE INCLUDED ON FORM 990, PART IX, LINE 5. 0 1468177 565578 902599 0 8832664 5374064 3458600 0 1425765 0 1425765 5786964 0 0 70147280 69576791 570489 3671191 -799680 2871511 3442000 73819000 3671191 529 3671720 70147280 70147280 70377000 800209 800209 69576791 69576791 ASC 740-10 FOOTNOTE SCHEDULE D, PART X, LINE 2 ICANN, UNDER THE PROVISIONS OF ASC 740, INCOME TAXES, HAD NO UNCERTAIN TAX POSITIONS REQUIRING ACCRUAL AS OF JUNE 30, 2012 AND 2011 RECONCILIATION OF CHANGE IN NET ASSETS FROM FORM 990 TO AFS SCHEDULE D, PART XI, LINE 8 $(800,209) - UNREALIZED GAIN/LOSS ON FOREIGN EXCHANGE $ 529 - ROUNDING ---------- $(799,680) - TOTAL RECONCILIATION OF REVENUE PER AFS WITH REVENUE PER RETURN SCHEDULE D, PART XII, LINE 2D $529 - ROUNDING RECONCILIATION OF EXPENSES PER AFS WITH EXPENSES PER RETURN SCHEDULE D, PART XIII, LINE 2E $800,209 - UNREALIZED GAIN/LOSS ON FOREIGN EXCHANGE true Central America and the Caribbean 138 Program Services SEE FORM 990 PART III 3065192 East Asia and the Pacific 1 19 Program Services SEE FORM 990 PART III 2786317 Europe (Including Iceland and Greenland) 1 150 Program Services SEE FORM 990 PART III 7183489 Middle East and North Africa 5 Program Services SEE FORM 990 PART III 361265 North America 19 Program Services SEE FORM 990 PART III 981262 Russia and the Newly Independent States 4 Program Services SEE FORM 990 PART III 44804 South America 9 Program Services SEE FORM 990 PART III 224421 South Asia 7 Program Services SEE FORM 990 PART III 51162 Sub-Saharan Africa 135 Program Services SEE FORM 990 PART III 3561166 2 150 2 486 18259078 18259077 Sub-Saharan Africa CONGO MTING SPONSORSHIP 5361 WIRE/CASH Europe/Iceland/Greenland SPONSORSHIPS 56842 WIRE/CASH Sub-Saharan Africa IETF 84 SPONSORSHIP 10000 WIRE/CASH South America 2011 LACNOG SPONSORSHIP 7000 WIRE/CASH Sub-Saharan Africa AFRICA FORUM SPONSORSHIP 7500 WIRE/CASH South America LACTLD WORKSHOP SPONSORSHIP 6000 WIRE/CASH Sub-Saharan Africa AFRICA DIGI. E SPONSORSHIP 10000 WIRE/CASH Cent. America/Caribbean LATIN AMERICAN SPONSORSHIP 7500 WIRE/CASH Middle East/North Africa GITEX TECH WEEK SPONSORSHIP 6991 WIRE/CASH Europe/Iceland/Greenland DNS MEETING SPONSORSHIP 24368 WIRE/CASH Sub-Saharan Africa IGF PROJECT SPONSORSHIP 103870 WIRE/CASH Europe/Iceland/Greenland IISI GARMISH MEETING SPONSORSHIP 10000 WIRE/CASH Europe/Iceland/Greenland EURODIG CONFERENCE SPONSORSHIP 6280 WIRE/CASH 13 FELLOWSHIP PROGRAM Europe/Iceland/Greenland 11 4800 WIRE/CASH 25389 AIRFARE/LODG ACTUAL EXP. FELLOWSHIP PROGRAM East Asia/Pacific 5 2200 WIRE/CASH 29495 AIRFARE/LODG ACTUAL EXP. FELLOWSHIP PROGRAM Middle East/North Africa 6 2800 WIRE/CASH 19508 AIRFARE/LODG ACTUAL EXP. FELLOWSHIP PROGRAM Cent. America/Caribbean 10 4800 WIRE/CASH 35250 AIRFARE/LODG ACTUAL EXP. FELLOWSHIP PROGRAM South America 12 5200 WIRE/CASH 34321 AIRFARE/LODG ACTUAL EXP. FELLOWSHIP PROGRAM South Asia 7 3400 WIRE/CASH 24041 AIRFARE/LODG ACTUAL EXP. FELLOWSHIP PROGRAM Sub-Saharan Africa 23 10700 WIRE/CASH 74272 AIRFARE/LODG ACTUAL EXP. FELLOWSHIP PROGRAM Russia 4 1400 WIRE/CASH 8170 AIRFARE/LODG ACTUAL EXP. false false false false false false ORGANIZATION'S PROCEDURES FOR MONITORING USE OF GRANT FUNDS OUTSIDE THE US SCHEDULE F, PART I, LINE 2 AN ICANN FELLOWSHIP IS A GRANT OF SUPPORT THAT IS AWARDED TO ENABLE INDIVIDUALS FROM STAKEHOLDER GROUPS AROUND THE WORLD TO ATTEND ICANN PUBLIC MEETINGS. THIS IS A MEANS TESTED PROGRAM. APPLICANTS MUST BE CITIZENS OF ECONOMICALLY ELIGIBLE COUNTRIES. ICANN USES THE WORLD BANK CLASSIFICATION OF LOW, LOWER-MIDDLE, AND UPPER-MIDDLE ECONOMIES. THE FELLOWSHIP COVERS THE COST OF ECONOMY CLASS AIRFARE AND HOTEL, AS WELL AS PROVIDING A STIPEND AFTER SUCCESSFUL COMPLETION OF THE PROGRAM, IN ORDER TO ASSIST IN COVERING SOME BASIC EXPENSES INCURRED BY THE FELLOW. RECIPIENTS ARE EXPECTED TO ACTIVELY CONTRIBUTE TO ICANN PROCESSES AND BE A PART OF THE NEXT GENERATION OF ICANN LEADERSHIP. FELLOWSHIPS ARE AWARDED BY AN INDEPENDENT SELECTION COMMITTEE BASED ON A MIX OF CRITERIA INCLUDING APPLICANT EXPERIENCE AND REFERENCES, GEOGRAPHIC PROXIMITY TO MEETING, RECEIPT OF PAST FELLOWSHIPS, ETC. ICANN STAFF AND THE SELECTION COMMITTEE HAVE MAINTAINED A RULE THAT INDIVIDUALS MAY NOT RECEIVE THIS GRANT OF SUPPORT MORE THAN THREE TIMES. FOR EACH PUBLIC MEETING THAT INCORPORATES THE FELLOWSHIP PROGRAM, A LIST OF SELECTED FELLOWS TO ATTEND THE UPCOMING MEETING IS POSTED ON THE ICANN WEBSITE PRIOR TO THE MEETING. SUBSEQUENT TO THE PUBLIC MEETING, A LIST OF FELLOWS WHO ATTENDED THE MEETING IS POSTED ON THE ICANN WEBSITE. TRAVEL AND HOTEL COSTS ASSOCIATED FOR FELLOWS PRE-SELECTED TO ATTEND THE PUBLIC MEETING ARE BOOKED AND PAID FOR DIRECTLY BY ICANN. ALL FELLOWS ARE ELIGIBLE TO RECEIVE A FLAT STIPEND NOT TO EXCEED U.S. $500.00. STIPENDS ARE GENERALLY PROVIDED TO FELLOWS BY WIRE TRANSFER, AND ARE PAID TO EACH FELLOW SUBSEQUENT TO THE MEETING AND AFTER THE FELLOW HAS DEMONSTRATED COMPLETION OF THE FELLOWSHIP PROGRAM. DURING THE TWELVE MONTHS ENDED JUNE 30, 2012, ICANN PAID $285,746 TO ALLOW SEVENTY-EIGHT (78) FELLOWSHIP PARTICIPANTS TO ATTEND THREE ICANN PUBLIC MEETINGS. ICANN ALSO PROVIDES TRAVEL SUPPORT TO OTHER MEMBERS OF THE VOLUNTEER COMMUNITY TO FACILITATE POLICY DEVELOPMENT EFFORTS AND OUTREACH IMPORTANT TO ICANN'S MISSION. THE PROCESS FOR SELECTION IS LARGELY BASED ON SPECIFIC CRITERIA ESTABLISHED BY EACH STAKEHOLDER/CONSTITUENCY GROUP. TRAVEL SUPPORT EXTENDED TO THESE GROUPS IS REPORTED AS PART OF TRAVEL EXPENSES IN PART II, STATEMENT OF FUNCTIONAL EXPENSES. FOR OTHER CONTRIBUTIONS, ICANN GLOBAL PARTNERSHIPS STAFF (NOW STAKEHOLDER ENGAGEMENT STAFF) DEVELOP REQUESTS BASED UPON ICANN'S STRATEGIC PLAN AND ICANN'S OPERATING PLAN. SPECIFIC NEEDS WITHIN SPECIFIC REGIONS OF THE WORLD ARE CONSIDERED. ICANN EXECUTIVES REVIEW THE LIST OF SUGGESTED CONTRIBUTIONS AND DECIDE ON WHICH CONTRIBUTIONS TO PURSUE. THE ICANN BOARD AND COMMUNITY CONSIDER THE CONTRIBUTIONS WITHIN THE OVERALL FISCAL YEAR OPERATING PLAN AND BUDGET PROCESS. SUPPLEMENTAL INFORMATION SCHEDULE F, PART I, LINE 3 THE INTERNATIONAL OFFICES INCLUDED ON PART I, LINE 3(B) OF SCHEDULE F, ARE THE SYDNEY, AUSTRALIA AND BRUSSELS, BELGIUM ICANN OFFICES. THE NUMBER OF PEOPLE IN EACH REGION SHOWN IN PART I LINE 3(C) OF SCHEDULE F INCLUDES THOSE EMPLOYEES, AGENTS, AND INDEPENDENT CONTRACTORS ("STAFF") WORKING FOR ICANN IN EACH REGION AND THE NUMBER OF STAFF ATTENDING DAKAR, SENEGAL (135), SAN JOSE, COSTA RICA (138), AND PRAGUE, CZECH REPUBLIC (150) INTERNATIONAL MEETINGS DURING FISCAL YEAR 2012. IN ADDITION, AN ESTIMATE OF THOSE OFFICERS AND OTHER EXECUTIVES WHO VISITED EACH REGION WAS INCLUDED. THE TOTAL EXPENDITURES BY REGION SHOWN IN PART I, LINE 3(F) OF SCHEDULE F INCLUDES: A. THE AMOUNTS PAID (FOR COMPENSATION, TRAVEL REIMBURSEMENT, AND OTHER COSTS AND EXPENSES) FROM THE US ACCOUNTS PAYABLE DEPARTMENT APPLICABLE TO THE REGION; B. ALL COSTS ASSOCIATED WITH THE THREE ANNUAL PUBLIC MEETINGS (I.E. DAKAR, SENEGAL, SAN JOSE, COSTA RICA, AND PRAGUE, CZECH REPUBLIC FOR FISCAL YEAR 2012); C. AMOUNTS EXPENDED TO FUND THE SYDNEY, AUSTRALIA AND BRUSSELS, BELGIUM BRANCH OFFICES AND PERSONNEL COSTS INCLUDING OFFICE EXPENSES, TRAVEL RELATED AND OTHER EXPENSES PAID BY THE US ACCOUNTS PAYABLE DEPARTMENT; D. ALL PAYMENTS MADE TO INTERNATIONAL BASED EMPLOYEES AND CONTRACTORS WERE RECORDED IN US DOLLARS. E. ESTIMATES OF TRAVEL COSTS ASSOCIATED WITH THOSE EXECUTIVES WHO TRAVEL FREQUENTLY WERE MADE AND THOSE ESTIMATED COSTS WERE ALLOCATED BY REGION. ESTIMATE WAS BASED ON ACTUAL BOOKED FLIGHTS EXCLUDING AMOUNTS OTHERWISE INCLUDED IN THE ACCOUNTING OF THE THREE PUBLIC MEETINGS IN DAKAR, SENEGAL, SAN JOSE, COSTA RICA, AND PRAGUE, CZECH REPUBLIC. F. NOTE THAT PROFESSIONAL SERVICE PROVIDERS AND OTHER COMPARABLE VENDORS ARE NOT TREATED AS AGENTS FOR THIS PURPOSE. STATEMENT OF ACTIVITIES OUTSIDE THE UNITED STATES SCHEDULE F, PART I, LINE 3 THE SUBTOTAL ON LINE 3(A), COLUMN F REPRESENTS THE INDIVIDUAL EMPLOYEES. THE ACTIVITIES PER REGION IN LINE 3 REPRESENT THE NUMBER OF REGIONS TRAVELLED TO BY EACH PERSON, WHICH MAY BE MORE THAN ONE REGION PER PERSON. X true true X X X X X X false false false false false false false true false Rod Beckstrom 747500 0 156000 0 0 0 31324 0 26848 0 961672 0 0 0 Akram Atallah 366300 0 75073 0 0 0 28750 0 25548 0 495671 0 0 0 John Jeffrey 312771 0 78553 0 0 0 11316 0 24348 0 426988 0 0 0 Kurt Pritz 307577 0 59410 0 0 0 30345 0 24348 0 421680 0 0 0 Steve Antonoff 167134 0 29469 0 0 0 20293 0 19618 0 236514 0 0 0 Barbara Clay 228388 0 61596 0 0 0 33000 0 8911 0 331895 0 0 0 Elise Gerich 196333 0 54426 0 0 0 32500 0 17330 0 300589 0 0 0 Daniel Halloran 201083 0 36565 0 0 0 27690 0 24348 0 289686 0 0 0 James Hedlund 256792 0 67189 0 0 0 12873 0 26603 0 363457 0 0 0 David Olive 237500 0 65252 0 0 0 33250 0 24103 0 360105 0 0 0 Michael Salazar 222604 0 39626 0 0 0 30279 0 24348 0 316857 0 0 0 Amy Stathos 222508 0 41202 0 0 0 27966 0 8911 0 300587 0 0 0 Elizabeth Gasster 212500 0 40455 0 0 0 45997 0 23302 0 322254 0 0 0 Denise Michel 211042 0 59272 0 0 0 32487 0 26848 0 329649 0 0 0 Margaret Milam 195258 0 37615 0 0 0 28571 0 26598 0 288042 0 0 0 Olof Nordling 247745 0 14522 0 0 0 30393 0 35908 0 328568 0 0 0 Timothy Cole 184100 0 31787 0 0 0 41128 0 8737 0 265752 0 0 0 Kevin Wilson 7054 0 13146 0 103594 0 7884 0 1263 0 132941 0 0 0 SUPPLEMENTAL COMPENSATION INFORMATION AMOUNTS LISTED IN PART VII OF FORM 990 AND SCHEDULE J REPRESENT AMOUNTS FOR THE 2011 CALENDAR YEAR. BENEFIT OPTIONS ARE THE SAME FOR ALL EMPLOYEES. SCHEDULE J, PART I, LINE 1A NO HOUSING ALLOWANCES WERE PROVIDED DURING CALENDAR 2011. COMPANION TRAVEL: ICANN'S TRAVEL GUIDELINES DO NOT PERMIT SPOUSAL OR FAMILY TRAVEL. FIRST CLASS TRAVEL: IN THE CASES WHERE FIRST CLASS TRAVEL WAS BOOKED, IT WAS IDENTIFIED AS THE LOWEST FARE AVAILABLE AT THE TIME THE TRAVEL WAS REQUIRED, WAS DUE TO A MEDICAL CONDITION, OR WAS PERMITTED UNDER ICANN'S TRAVEL POLICY WHERE THE SELECTION OF BUSINESS CLASS WAS ALLOWED, BUT WAS AUTOMATICALLY CHANGED TO FIRST CLASS BY THE AIRLINE ON A TWO-CLASS PLANE. THESE AMOUNTS WERE FOR BUSINESS PURPOSES AND WERE NOT REPORTED AS INCOME ON THE EMPLOYEES' W-2S. SCHEDULE J, PART I, LINE 7 REGARDING BONUSES: THE OVERARCHING OBJECTIVE OF ICANN'S REMUNERATION FRAMEWORK IS TO ENSURE REMUNERATION PROVIDED IS COMPETITIVE GLOBALLY AND THAT IT PROVIDES STAFF WITH APPROPRIATE MOTIVATION FOR HIGH PERFORMANCE TOWARDS AGREED OBJECTIVES. THIS FRAMEWORK IS DESCRIBED IN DETAIL WITHIN THE DOCUMENT ENTITLED ICANN REMUNERATION. HTTP://WWW.ICANN.ORG/EN/ABOUT/FINANCIALS/REMUNERATION-PRACTICES-FY13-15SEP 12-EN.PDF SCHEDULE J, PART II ICANN'S OVERALL COMPENSATION PHILOSOPHY IS TO TARGET COMPENSATION BETWEEN THE 50TH AND 75TH PERCENTILE OF THE MARKET, TO ATTRACT AND RETAIN THE RIGHT STAFF. THE DRIVING ELEMENT OF THIS PHILOSOPHY IS THAT ICANN'S COMPENSATION IS MARKET-BASED. ICANN HAS EMPLOYEES IN MANY DIFFERENT PARTS OF THE WORLD, AND STRIVES TO APPLY THIS PHILOSOPHY LOCALLY. EMPLOYMENT MARKETS AROUND THE WORLD ARE QUITE DIFFERENT, AND ALSO BRING DIFFERENT TAX, BENEFIT, AND OTHER LOCAL CONDITIONS TO BEAR. NOTABLY, BELGIUM, WHERE ICANN HAS FOUR EMPLOYEES AS OF 31 DECEMBER 2011, REPRESENTS QUITE A DIFFERENT EMPLOYMENT MARKET THAN THAT IN THE U.S. BASE COMPENSATION RATES IN BELGIUM ARE HIGHER DUE TO DIFFERENCES IN TAX RATES AND OTHER FACTORS SUCH AS MEDICAL PROGRAMS. IN ADDITION, EXCHANGE RATE FLUCTUATIONS ALSO AFFECT THE U.S. DOLLAR EQUIVALENCE OF THE BELGIUM STAFF. THEREFORE, THE U.S. DOLLAR DOMINATED COMPENSATION OF ICANN'S BELGIUM BASED STAFF IS HIGHER THAN THEIR U.S. BASED COUNTERPARTS. SCHEDULE J, PART II, COLUMN C DURING THE YEAR IT WAS DETERMINED THAT THE ORGANIZATION UNDER-REPORTED A SMALL PORTION OF THE DEFERRED COMPENSATION FOR THOSE EMPLOYEES LISTED ON SCHEDULE J, PART II, COLUMN (C). THE CONTRIBUTION THAT WAS NOT REPORTED WAS THE DEFERRED COMPENSATION THAT THE ORGANIZATION MAKES FOR ALL ELIGIBLE EMPLOYEES. THIS IS EQUAL TO 5% OF THE EMPLOYEE'S ELIGIBLE COMPENSATION, AS DEFINED BY THE 401(K) PLAN, AND SUBJECT TO MAXIMUM LIMITS. THIS WAS ONLY A REPORTING ISSUE IN THE 990; THIS AMOUNT HAS BEEN DOCUMENTED ELSEWHERE AS DEFERRED COMPENSATION, AS IT IS INTENDED. FOLLOWING IS THE SUMMARY OF THE AMOUNT BY WHICH THE CONTRIBUTIONS WERE UNDER-REPORTED ON THE FORM 990, RESPECTIVELY, FOR THE YEARS ENDED 6/30/2009, 6/30/2010 AND 6/30/2011. FORM 990 FOR THE FISCAL YEAR ENDING 30 JUNE 2009, COMPENSATION FOR THE CALENDAR YEAR ENDING 31 DECEMBER 2008 DEFFERED COMPENSATION NAME AMOUNT UNDER-REPORTED DOUGLAS BRENT - 1,824 JOHN JEFFREY - (479) PAUL LEVINS - 2,364 KURT PRITZ - 4,593 KEVIN WILSON - (0) STEVE ANTONOFF - 651 DAVID CONRAD - 1,875 DENISE MICHEL - 1,396 AMY STATHOS - 1,217 THERESA SWINEHART - 506 ELIZABETH GASSTER - 929 DANIEL HALLORAN - 1,000 JOHN CRAIN - 989 FORM 990 FOR THE FISCAL YEAR ENDING 30 JUNE 2010, COMPENSATION FOR THE CALENDAR YEAR ENDING 31 DECEMBER 2009 DEFERRED COMPENSATION NAME AMOUNT UNDER-REPORTED ROD BECKSTROM - 14,063 DOUGLAS BRENT - 13,438 JOHN JEFFREY - 12,250 PAUL LEVINS - 13,756 KURT PRITZ - 11,409 KEVIN WILSON - 3,855 STEVE ANTONOFF - 6,669 DAVID CONRAD - 12,250 DENISE MICHEL - 9,750 AMY STATHOS - 11,551 THERESA SWINEHART - 10,375 ELIZABETH GASSTER - 4,010 MARGARET MILAM - 8,259 FORM 990 FOR THE FISCAL YEAR ENDING 30 JUNE 2011, COMPENSATION FOR THE CALENDAR YEAR ENDING 31 DECEMBER 2010 DEFERRED COMPENSATION NAME AMOUNT UNDER-REPORTED STEVE ANTONOFF - 9,074 AKRAM ATALLAH - 1,397 ROD BECKSTROM - 12,250 DOUG BRENT - 12,106 BARBARA CLAY - 9,227 DAVID CONRAD - 7,515 TINA DAM - 5,820 ELIZABETH GASSTER - 6,088 ELISE GERICH - 7,753 DANIEL HALLORAN - 10,346 JAMES HEDLUND - 12,250 JOHN JEFFREY - 12,250 DENISE MICHEL - 32,548 MARGARET MILAM - 10,581 DAVID OLIVE - 6,571 KURT PRITZ - 11,333 MICHAEL SALAZAR - 11,938 AMY STATHOS - 11,656 THERESA SWINEHART - 1,600 KEVIN WILSON - 5,079 MELBOURNE IT BRUCE TONKIN - DIRECTOR 732408 SEE PART V false BUSINESS TRANSACTIONS WITH RELATED PERSONS SCHEDULE L, PART IV 1. DR. BRUCE TONKIN IS A VOTING MEMBER OF THE BOARD OF DIRECTORS. DR. TONKIN IS ALSO CHIEF STRATEGY OFFICER OF MELBOURNE IT, AN ICANN ACCREDITED REGISTRAR. REVENUE FROM MELBOURNE IT AMOUNTED TO $732,408 AND $766,416 FOR THE YEARS ENDED JUNE 30, 2012 AND 2011, RESPECTIVELY, UNDER THE FEE STRUCTURE OF THE STANDARD REGISTRAR ACCREDITATION AGREEMENT. TO AVOID ANY CONFLICT OF INTEREST BETWEEN ICANN AND MELBOURNE IT, DR. TONKIN ABSTAINS FROM VOTING ON ALL MATTERS HE IDENTIFIES AS POTENTIAL CONFLICTS OF INTEREST WHICH COME BEFORE THE BOARD. IN ADDITION TO THE SPECIFIC DISCLOSURES ABOVE, ICANN MAY ENTER INTO OR CONSIDER PARTICIPATION IN SMALL ARMS' LENGTH TRANSACTIONS BETWEEN ICANN AND CERTAIN TAXABLE ORGANIZATIONS WITH WHICH CERTAIN ICANN DIRECTORS OR OFFICERS (OR MEMBERS OF THEIR FAMILIES) MAY HAVE AN AFFILIATION. UNDER ICANN'S CONFLICTS OF INTEREST POLICY, ALL OFFICERS AND DIRECTORS ARE REQUIRED TO DISCLOSE ANY POTENTIAL CONFLICTS OF INTEREST BEFORE ENTERING INTO DISCUSSION ON SUCH MATTERS. IN ADDITION, THE BOARD COMMITTEE RESPONSIBLE FOR CONFLICTS OF INTEREST REVIEWS ALL BOARD MEMBER CONFLICTS OF INTEREST STATEMENTS. SEE: HTTP://WWW.ICANN.ORG/EN/GROUPS/BOARD/DOCUMENTS/SOIS ORGANIZATION'S MISSION FORM 990, PART I, LINE 1 AND PART III, LINE I THE MISSION OF THE INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS ("ICANN") IS TO PROMOTE THE GLOBAL PUBLIC INTEREST IN THE OPERATIONAL STABILITY OF THE INTERNET BY (I) COORDINATING THE ASSIGNMENT OF INTERNET TECHNICAL PARAMETERS AS NEEDED TO MAINTAIN UNIVERSAL CONNECTIVITY ON THE INTERNET; (II) PERFORMING AND OVERSEEING FUNCTIONS RELATED TO THE COORDINATION OF THE INTERNET PROTOCOL ("IP") ADDRESS SPACE; (III) PERFORMING AND OVERSEEING FUNCTIONS RELATED TO THE COORDINATION OF THE INTERNET DOMAIN NAME SYSTEM ("DNS"), INCLUDING THE DEVELOPMENT OF POLICIES FOR DETERMINING THE CIRCUMSTANCES UNDER WHICH NEW TOP-LEVEL DOMAINS ARE ADDED TO THE DNS ROOT SYSTEM; (IV) OVERSEEING OPERATION OF THE AUTHORITATIVE INTERNET DNS ROOT SERVER SYSTEM; AND (V) ENGAGING IN ANY OTHER RELATED LAWFUL ACTIVITY IN FURTHERANCE OF ITEMS (I) THROUGH (IV). SEE ADDITIONAL INFORMATION ABOUT ICANN'S PROGRAMS AND ACTIVITIES ON THE ICANN WEBSITE AND IN THE ICANN ANNUAL REPORT POSTED AT ICANN.ORG. GOVERNING BODY FORM 990, PART I, LINE 3 AND PART VI, LINE 1A IN ADDITION TO THE VOTING MEMBERS OF THE BOARD OF DIRECTORS, ICANN'S BYLAWS AS OF JUNE 30, 2012 ALLOWED FOR FIVE (5) NON-VOTING LIAISONS. THE NON-VOTING LIAISONS ARE ENTITLED TO ATTEND BOARD MEETINGS, PARTICIPATE IN BOARD DISCUSSIONS AND DELIBERATIONS, AND HAVE ACCESS (UNDER CONDITIONS ESTABLISHED BY THE BOARD) TO MATERIALS PROVIDED TO DIRECTORS FOR USE IN BOARD DISCUSSIONS, DELIBERATIONS AND MEETINGS. THE FOLLOWING INDIVIDUALS SERVED AS NON-VOTING LIAISONS DURING THE FISCAL YEAR ENDING JUNE 30, 2012: 1. HEATHER DRYDEN (GAC, 2010-2015) 2. RAM MOHAN (SSAC, 2009-2012) 3. THOMAS NARTEN (IETF, 2013) 4. THOMAS ROESSLER (TLG, 2011-2012) 5. SUZANNE WOOLF (RSSAC, 2004-2013) 6. REINHARD SCHOLL (TLG, 2010-2011) PROGRAM SERVICE ACCOMPLISHMENTS FORM 990, PART III, LINE 2 CURRENTLY THE INTERNET NAMESPACE CONSISTS OF 22 GENERIC TOP LEVEL DOMAINS (GTLDS) AND OVER 250 COUNTRY CODE TOP LEVEL DOMAINS (CCTLDS) OPERATING ON VARIOUS MODELS. EACH OF THE GTLDS HAS A DESIGNATED "REGISTRY OPERATOR" AND, IN MOST CASES, A REGISTRY AGREEMENT BETWEEN THE OPERATOR (OR SPONSOR) AND ICANN. THE REGISTRY OPERATOR IS RESPONSIBLE FOR THE TECHNICAL OPERATION OF THE TLD, INCLUDING ALL OF THE NAMES REGISTERED IN THAT TLD. OVER 1,000 ICANN ACCREDITED REGISTRARS INTERACT WITH REGISTRANTS (AND OTHERS) TO PERFORM DOMAIN NAME REGISTRATION AND OTHER RELATED SERVICES FOR NEW GTLDS. THE NEW GTLD PROGRAM PROVIDES A MEANS FOR PROSPECTIVE REGISTRY OPERATORS TO APPLY FOR NEW GTLDS, AND CREATE NEW OPTIONS FOR CONSUMERS. THE PROGRAM OPENED ITS FIRST APPLICATION ROUND IN JANUARY 2012. FORM 990, PART III, LINE 4 ICANN IS A MULTI-STAKEHOLDER ORGANIZATION THAT COORDINATES THE INTERNET DOMAIN NAME SYSTEM (DNS) AND ADDRESSING FOR THE BENEFIT OF INTERNET USERS WORLDWIDE, ENABLING A SINGLE, INTEROPERABLE INTERNET. AS OF 30 JUNE 2012, ICANN WAS RESPONSIBLE FOR THE GLOBAL TECHNICAL COORDINATION OF OVER 240 MILLION INTERNET DOMAIN NAMES, INCLUDING 133 MILLION INTERNET DOMAIN NAMES FOUND IN GENERIC TOP-LEVEL DOMAINS THAT ARE GOVERNED BY ICANN'S COMMUNITY-DEVELOPED POLICIES, AS WELL AS THE ALLOCATION OF OVER A BILLION NETWORK ADDRESSES. CONNECTING BILLIONS OF COMPUTERS, PHONES AND OTHER DEVICES ACROSS THE INTERNET, DNS CYBER-SECURITY IS A TOP PRIORITY. SEE ADDITIONAL INFORMATION ABOUT ICANN'S PROGRAMS AND ACTIVITIES ON THE ICANN WEBSITE AND IN THE ICANN ANNUAL REPORT POSTED AT ICANN.ORG. DESCRIPTION OF CLASSES OF PERSONS AND THE NATURE OF THEIR RIGHTS FORM 990, PART VI, LINE 7A THE NOMINATING COMMITTEE (NOMCOM) IS RESPONSIBLE FOR THE SELECTION OF EIGHT ICANN BOARD MEMBERS AND FOR OTHER SELECTIONS AS ARE SET FORTH IN THE BYLAWS. (SEE BYLAWS ARTICLE VII, SECTION 1.) THE NOMCOM IS CHARGED WITH POPULATING A PORTION OF THE ICANN BOARD AS NOTED ABOVE, AS WELL AS THE ALAC, THE CCNSO COUNCIL AND THE GNSO COUNCIL. THE NOMCOM COMPLEMENTS THE OTHER MEANS FOR FILLING A PORTION OF KEY ICANN LEADERSHIP POSITIONS ACHIEVED WITHIN THE SUPPORTING ORGANIZATIONS AND ADVISORY COMMITTEES. THE BYLAWS ALSO STATE THAT THE NOMCOM SHALL ADOPT SUCH OPERATING PROCEDURES AS IT DEEMS NECESSARY, WHICH SHALL BE PUBLISHED ON THE ICANN WEBSITE. THE NOMCOM IS DESIGNED TO FUNCTION INDEPENDENTLY FROM THE BOARD, THE SUPPORTING ORGANIZATIONS, AND ADVISORY COMMITTEES. NOMCOM MEMBERS ACT ONLY ON BEHALF OF THE INTERESTS OF THE GLOBAL INTERNET COMMUNITY AND WITHIN THE SCOPE OF THE ICANN MISSION AND RESPONSIBILITIES ASSIGNED TO IT BY THE ICANN BYLAWS. MEMBERS CONTRIBUTE TO THE NOMCOM BOTH THEIR UNDERSTANDING OF THE BROAD INTERESTS OF THE INTERNET AS A WHOLE AND THEIR KNOWLEDGE AND EXPERIENCE OF THE CONCERNS AND INTERESTS OF THE INTERNET STAKEHOLDERS THAT HAVE APPOINTED THEM. THE CHALLENGE FOR THE NOMCOM IS TO INTEGRATE THESE PERSPECTIVES AND DERIVE CONSENSUS IN ITS SELECTIONS. ALTHOUGH APPOINTED BY SUPPORTING ORGANIZATIONS AND OTHER ICANN BODIES, INDIVIDUAL NOMCOM MEMBERS ARE NOT ACCOUNTABLE TO THEIR APPOINTING CONSTITUENCIES. MEMBERS ARE, OF COURSE, ACCOUNTABLE FOR ADHERENCE TO THE BYLAWS AND FOR COMPLIANCE WITH THE RULES AND PROCEDURES ESTABLISHED BY THE NOMCOM. LOCAL CHAPTERS, BRANCHES AND AFFILIATES FORM 990, PART VI, LINE 10A AND 10B ICANN HAS OFFICES IN BRUSSELS, BELGIUM AND SYDNEY, AUSTRALIA, WHICH PROVIDE OPERATIONAL SUPPORT TO THEIR RESPECTIVE GEOGRAPHICAL REGIONS. (THE SYDNEY, AUSTRALIA OFFICE WAS CLOSED AFTER JUNE 30, 2012.) FORM 990 REVIEW PROCESS FORM 990, PART VI, LINE 11B A COPY OF THE FORM 990 IS PROVIDED TO ICANN'S BOARD MEMBERS BEFORE IT IS FILED. THE PROCESS BY WHICH THE FORM 990 IS PREPARED, REVIEWED AND RECEIVED IS AS FOLLOWS: 1. ICANN ENGAGES AN OUTSIDE TAX PREPARER TO ASSIST IN THE PREPARATION OF ITS FORM 990. 2. ICANN'S CONTROLLER, CFO, AND OFFICE OF THE GENERAL COUNSEL REVIEW THE FORM 990, AND THE CONTROLLER AND CFO SIGN OFF FOR APPROVAL. 3. THE FORM 990 IS PROVIDED TO THE ICANN BOARD MEMBERS. CONFLICTS OF INTEREST POLICY FORM 990, PART VI, LINE 12C ICANN HAS WRITTEN CONFLICTS OF INTEREST POLICIES, WHICH ARE APPLICABLE TO ALL BOARD MEMBERS AND EMPLOYEES. THE OFFICE OF THE GENERAL COUNSEL MONITORS THESE POLICIES WITH OVERSIGHT BY THE BOARD GOVERNANCE COMMITTEE AS THEY RELATE TO THE BOARD. A CONFLICTS OF INTEREST DISCLOSURE STATEMENT IS COMPLETED ANNUALLY AND SIGNED BY EACH BOARD MEMBER, OFFICER AND KEY EMPLOYEE (WHICH HAS BEEN EXTENDED IN FY 13 TO ALL EMPLOYEES). THE DISCLOSURE STATEMENTS ARE REVIEWED BY THE GENERAL COUNSEL, AND A REPORT OF ITS FINDINGS IS PREPARED. THE BOARD MEMBER, OFFICER AND KEY EMPLOYEE CONFLICTS OF INTEREST POLICY CAN BE FOUND HERE: HTTP://WWW.ICANN.ORG/EN/GROUPS/BOARD/GOVERNANCE/COI THIS POLICY DESCRIBES THE DUTY TO DISCLOSE, THE PROCEDURES FOR ADDRESSING CONFLICTS OF INTEREST, THE DUTY TO ABSTAIN, HOW VIOLATIONS OF THE CONFLICTS OF INTEREST POLICY WILL BE HANDLED, HOW TO HANDLE A BOARD MEMBER WHO RECEIVES COMPENSATION, THE ANNUAL STATEMENT PROCESS BY WHICH ALL COVERED PERSONS SIGN ANNUALLY THEIR AFFIRMATION OF THE POLICY AND DISCLOSE THEIR ACTUAL OR POTENTIAL CONFLICTS, AND THE REQUIREMENT AND NATURE OF PERIODIC REVIEWS. THE REPORTS OF BOARD MEMBER AND OFFICER REPORTED STATEMENTS OF INTEREST ARE POSTED ON THE WEBSITE. THE REPORTS CAN BE FOUND AT: HTTP://WWW.ICANN.ORG/EN/GROUPS/BOARD/DOCUMENTS/SOIS RETENTION AND DESTRUCTION POLICY FORM 990, PART VI, LINE 14 ICANN MAINTAINS AN INTERNAL DOCUMENT RETENTION AND DESTRUCTION POLICY AND HISTORICALLY HAS FOLLOWED BEST INDUSTRY PRACTICES FOR RETENTION AND DESTRUCTION. PROCESS FOR DETERMINING COMPENSATION FORM 990, PART VI, LINES 15A AND 15B ICANN FOLLOWS PRINCIPLES OF ACCOUNTABILITY AND TRANSPARENCY AND DESCRIBES ITS REMUNERATION PLANS AND PRACTICES, WHICH ARE CONTINUALLY UPDATED, AND ARE POSTED AT: http://www.icann.org/en/about/financials/ remuneration-practices-fy13-15sep12-en.pdf THE PROCESS FOR DETERMINING COMPENSATION INCLUDING SURVEYS OF COMPARABLE POSITIONS AND OTHER MARKET STUDIES IS DESCRIBED IN THIS COMPENSATION REPORT. EXECUTIVE COMPENSATION IS DISCLOSED AS WELL. SALARIES OF ALL OFFICERS ARE REVIEWED AND APPROVED BY THE BOARD OF DIRECTORS IN RESPONSE TO RECOMMENDATIONS BY THE COMPENSATION COMMITTEE. MINUTES OF THESE MEETINGS ARE MAINTAINED BY THE OFFICE OF THE GENERAL COUNSEL AS PART OF ITS CORPORATE SECRETARIAT FUNCTION. EACH YEAR THE APPOINTMENT FOR EACH OFFICER IS CONFIRMED BY THE BOARD OF DIRECTORS AT THE ANNUAL GENERAL MEETING. THE COMPENSATION STUDIES FOR MARKET COMPARABILITY CONDUCTED BY TOWERS WATSON IN 2009 FOR OFFICERS, INCLUDING THE CEO, WERE UPDATED IN 2011. THE COMPENSATION STUDIES FOR ALL NON-OFFICER POSITIONS IN ICANN WERE UPDATED IN 2010 AND WERE UPDATED AGAIN BY TOWERS WATSON IN 2012. AVAILABILITY OF 990 FORM 990, PART VI, LINE 18 ICANN POSTS ITS FORM 990 ON ITS WEBSITE. THE PRIOR YEAR POSTING IS LOCATED AT: HTTP://WWW.ICANN.ORG/EN/ABOUT/FINANCIALS/FISCAL-30JUN11-EN.HTM AFTER SUBMISSION TO THE IRS, THE 2011 FORM 990 WILL BE POSTED HERE: HTTP://WWW.ICANN.ORG/EN/ABOUT/FINANCIALS/FISCAL-30JUN12-EN.HTM IN ADDITION, THE FORM 990 IS POSTED ON THE WWW.GUIDESTAR.ORG WEBSITE. FINALLY, HARD COPIES OF THE FORM 990 ARE AVAILABLE UPON REQUEST FROM THE CFO OF ICANN. REQUESTS SHOULD BE SUBMITTED TO ICANN'S CFO BY EMAIL TO XAVIER.CALVEZ@ICANN.ORG, OR BY PHONE AT +1.310.301.5838. ICANN POSTS THE ORIGINAL FORM 1023 (APPLICATION FOR TAX-EXEMPT STATUS) ON ITS WEBSITE. THE ORIGINAL FORM 1023 POST IS LOCATED AT: HTTP://WWW.ICANN.ORG/EN/ABOUT/FINANCIALS ICANN POSTS ITS MOST RECENT IRS FAVORABLE DETERMINATION LETTER, AND OTHER INFORMATION AT: http://www.icann.org/en/about/financials ICANN'S TAX EXEMPT STATUS INFORMATION CAN BE FOUND AT: IRS-FAVORABLE-DETERMINATION-LETTER-19SEP08-EN.PDF AVAILABILITY OF GOVERNING DOCS, CONFLICTS OF INTEREST, AND FINANCIAL STMTS FORM 990, PART VI, LINE 19 IN ACCORDANCE WITH ITS CORPORATE BYLAWS (SEE: HTTP://WWW.ICANN.ORG/EN/ABOUT/GOVERNANCE/BYLAWS) AND THE AFFIRMATION OF COMMITMENTS WITH THE UNITED STATES DEPARTMENT OF COMMERCE, ICANN IS COMMITTED TO ACCOUNTABILITY AND TRANSPARENCY PRINCIPLES. THIS INCLUDES PROVIDING EXTENSIVE ACCESS TO THE PUBLIC THROUGH THE ICANN WEBSITE OF ITS GOVERNING DOCUMENTS, CONFLICTS OF INTEREST POLICY, AND FINANCIAL STATEMENTS. SEE: http://www.icann.org/en/about/governance OFFICER/DIRECTOR SERVICE DATES FORM 990, PART VII IN PART VII, A DATE FOLLOWING AN OFFICER/DIRECTOR'S NAME INDICATES THE DATE ON WHICH THE OFFICER/DIRECTOR'S SERVICES ENDED. IF NO DATE IS INDICATED, THAT OFFICER/DIRECTOR WAS ACTIVE AS OF JUNE 30, 2012. OTHER CHANGES IN NET ASSETS FORM 990, PART XI, LINE 5 UNREALIZED GAINS ON INVESTMENTS $ 3,671,191 UNREALIZED GAINS/LOSS ON FOREIGN EXCHANGE $( 800,209) ROUNDING $ 476 ------------ TOTAL $ 2,871,458 CONTRIBUTIONS FORM 990, SCHEDULE B, LINE 17 NEUSTAR SPONSORS CCTLD'S AND GTLD'S. FORM 990, SCHEDULE B, LINE 35 VERISIGN SPONSORS THREE GTLD'S AND ONE CCTLD.