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Minutes | Board Finance Committee (BFC) Minutes

BFC Attendees: Sébastien Bachollet, Cherine Chalaby (Chair), Chris Disspain, Bruno Lanvin, George Sadowsky and Mike Silber

Other Board member Attendees: Erika Mann and Bruce Tonkin

ICANN Executive and Staff Member Attendees: Megan Bishop (Board Support Coordinator), Xavier Calvez (Chief Financial Officer), John Jeffrey (General Counsel and Secretary), Jacks Khawaja (Enterprise Risk Management Director), Vinciane Koenigsfeld (Board Support Content Manager), Ashwin Rangan (Chief Innovation & Information Officer) Amy Stathos (Deputy General Counsel), Taryn Presley (Sr. Manager, FP&A) and Wendy Profit (Board Support Specialist)

The following is a summary of discussions, actions taken and actions identified:

  • BFC Schedule – The BFC discussed its schedule, which is on track as planned.

  • Budget – The BFC reviewed the FY14 Budget, which is showing a total revenue of approximately US$200 million for the year and total operating expenses of approximately US$150M. The projected revenue for FY15 is approximately US$173M. The committee also discussed budgeted costs.

  • Contingency Fund – The BFC reviewed the status of the FY14 Contingency Fund. The BFC was advised that US$4.8 million of expenditures have been applied against the US$3.7 million the contingency fund as a result of 1Net and NETmundial related expenses, leaving approximately US$1.1 million of expenditures not captured by the contingency fund. This additional amount has been covered by the reduction of scope of the Strategy Panels, which reduced that budget item by approximately US$2.0 million.

  • Operating Fund – The BFC discussed the status of the operating fund, noting that the operating cash on hand has increased by approximately US$6.1 million from December 2013 to March 2014 mainly as a result of: (i) reimbursement of historical development costs from the New gTLD Program; (ii) reimbursement of direct and allocated staff costs to the New gTLD Program; and other net variances.

  • Reserve Fund – The BFC reviewed the status of the reserve fund, which is currently set for a 12-month period. The BFC was advised that the fund balance is currently approximately US$82.3 million. There is still approximately another US$10M to be re-paid to the reserve fund from historical costs over the next 18 months on a quarterly basis.

  • New gTLD Cash/Investments – The BFC noted that the new gTLD investments had a larger return on investment than anticipated.

  • Variance Report – Staff briefed the BFC on variance analysis compared the budget of FY14 for entire organization to the forecasted amount for FY14 (including Operations and New gTLD Program), using ten months of actual activity through April 2014 and forecast for May and June 2014. Budget revenue of approximately US$200M and forecast revenue of approximately US$127M. The committee then looked at the Operations separately from the New gTLD Program, showing budget and forecast of approximately US$92M, with forecasted revenue being approximately US$84M, which is approximately US$4M deficit from budget to forecast, and investments forecasted to be approximately US$13M compared to budget of approximately US$11M, leading to a total net asset change of approximately US$2M less than budget. The BFC then also looked at the New gTLD Program operations. The committee also discussed the best manner in which to present the information to the public in order to allow them to compare forecasted amounts to budgeted amounts.

Domain Name System
Internationalized Domain Name ,IDN,"IDNs are domain names that include characters used in the local representation of languages that are not written with the twenty-six letters of the basic Latin alphabet ""a-z"". An IDN can contain Latin letters with diacritical marks, as required by many European languages, or may consist of characters from non-Latin scripts such as Arabic or Chinese. Many languages also use other types of digits than the European ""0-9"". The basic Latin alphabet together with the European-Arabic digits are, for the purpose of domain names, termed ""ASCII characters"" (ASCII = American Standard Code for Information Interchange). These are also included in the broader range of ""Unicode characters"" that provides the basis for IDNs. The ""hostname rule"" requires that all domain names of the type under consideration here are stored in the DNS using only the ASCII characters listed above, with the one further addition of the hyphen ""-"". The Unicode form of an IDN therefore requires special encoding before it is entered into the DNS. The following terminology is used when distinguishing between these forms: A domain name consists of a series of ""labels"" (separated by ""dots""). The ASCII form of an IDN label is termed an ""A-label"". All operations defined in the DNS protocol use A-labels exclusively. The Unicode form, which a user expects to be displayed, is termed a ""U-label"". The difference may be illustrated with the Hindi word for ""test"" — परीका — appearing here as a U-label would (in the Devanagari script). A special form of ""ASCII compatible encoding"" (abbreviated ACE) is applied to this to produce the corresponding A-label: xn--11b5bs1di. A domain name that only includes ASCII letters, digits, and hyphens is termed an ""LDH label"". Although the definitions of A-labels and LDH-labels overlap, a name consisting exclusively of LDH labels, such as"""" is not an IDN."