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Item 8. Financial Statements and Supplementary Data

2021-02-19 compared with 2020-02-21 · 344 added, 502 removed, 889 unchanged (49% of the section changed)

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Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income

Consolidated Statements of Stockholders' Equity

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Stockholders' Equity (Deficit)

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of GoDaddy Inc.

(the Company) as of December 31, 2019 and 2018, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2019 and 2018, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with U.S.

(the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity (deficit), and cash flows for each of the three years in the period ended December 31, 2020, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S.

generally accepted accounting principles.

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Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Payable to Related Parties Pursuant to Tax Receivable Agreements

Description of the Matter As discussed in Notes 2 and 16 of the December 31, 2019 consolidated financial statements, the Company has recorded a $175.3 million liability, payable to counterparties pursuant to Tax Receivable Agreements (TRA).

The TRA liability represents the amount the Company estimates to pay to the counterparties to the TRA that are former owners of the Company (pre-IPO owners).

The liability is computed as 85% of the estimated cash tax savings to be received by the Company from utilizing the positive tax attributes contributed by pre-IPO owners.

Auditing the TRA liability computation each period is a complex process as a result of the assumptions and management judgement utilized in the determination of the expected cash tax savings to be realized.

In particular, estimated future taxable income can be sensitive to changes in the assumed revenue growth rate and expected operating margin, which are affected by expectations about future market conditions and are inherently uncertain due to their forward-looking nature.

How We Addressed the Matter in Our Audit We tested controls that address the risks of material misstatement relating to the measurement of the TRA liability.

For example, we tested controls over management's review of the sensitivity of the projections of future taxable income to the recorded TRA liability.

Our audit procedures included, among others, independent recalculations of the recorded liability.

We also evaluated management's estimates used in developing a forecast of future taxable income.

For example, we compared the projections of future taxable income with the actual results of prior periods, as well as management's consideration of current industry and economic trends.

We also compared the projections of future taxable income with other forecasted financial information prepared by the Company.

Legal Contingencies

Description of the Matter As described in Note 13 to the consolidated financial statements, the Company accrues for losses and defense costs related to legal contingencies at the time a loss is probable, and the amount of loss can be reasonably estimated.

At December 31, 2019, the Company's legal liability reserve balance included $18.1 million, relating primarily to a single legal matter.

The Company believes there is a range of estimated losses with respect to this matter, with $35.0 million representing the high end of the range.

Auditing management's accounting for and disclosure of loss contingencies related to the primary legal matter in which a loss was determined to be probable was challenging due to the significant judgment required to develop the key assumptions utilized to measure the liability and the nature of information available given the early stages of the settlement process and the limited historical information available.

How We Addressed the Matter in Our Audit We tested controls that address the risks of material misstatement relating to legal contingencies.

For example, we tested controls over management's review of the model used to estimate the probable loss and potential range of loss, as well as significant assumptions utilized.

We also tested management's controls over the completeness and accuracy of the data consumed.

Our audit procedures also included, among others, evaluating the Company's method of measuring the reserve for the settlement of the claims, the analyses of determining the range of possible losses, and the accuracy and completeness of the data used in the analyses.

We also discussed with the Company's internal and external legal counsel the development of the range of loss and evaluated new or contrary information affecting the estimate.

Additionally, we assessed the adequacy of the Company's disclosures included in Note 13 in relation to these matters.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Business Combination – Valuation of Acquired Intangible Asset

Description of the Matter As discussed in Note 3 of the consolidated financial statements, the Company completed the acquisition of the registry operations of Neustar Inc.

in August 2020 for purchase consideration consisting of $217.2 million in cash and the settlement of $19.4 million in pre-existing contractual relationships.

The Company accounted for this transaction as a business combination.

Auditing management's accounting for the acquisition was complex due to the significant estimation uncertainty in determining the fair value of the acquired indefinite-lived contractual-based asset totaling $67.0 million.

The contractual-based intangible asset was valued using an income-based approach.

The fair value determinations of the asset acquired required management to make estimates and significant assumptions regarding the future cash flows of the intangible asset, including revenue growth rates, earnings metrics, economic life, and discount rate.

These significant assumptions were forward-looking and could be affected by future market and economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the controls that address the risks of material misstatement relating to valuation of the acquired intangible asset.

For example, we tested controls over management's review of the valuation model for the acquired intangible asset, as well as the completeness and accuracy of the valuation inputs.

To test the estimated fair value of the intangible asset, our audit procedures included, among others, assessing the fair value methodology used by the Company and testing the significant assumptions and the underlying data used by the Company in its analyses.

We involved firm valuation specialists to assist us in our evaluation of the Company's valuation model, related assumptions and outputs of the valuation model.

We evaluated the methodology used by the Company and significant assumptions included in the fair value estimate.

/s/ Ernst & Young LLP

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Total assets $ 6,432.9 $ 6,301.2

Liabilities and stockholders' equity

Liabilities and stockholders' equity (deficit)

Current liabilities:

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Long-term debt 24.3 18.4

Payable pursuant to tax receivable agreements 0.2 —

Total current liabilities 2,314.2 2,001.1

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Operating lease liabilities, net of current portion 166.7 192.9

Payable to related parties pursuant to tax receivable agreements 175.3 174.3

Payable pursuant to tax receivable agreements, net of current portion — 175.3

Other long-term liabilities 56.6 17.7

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Commitments and contingencies

Stockholders' equity:

Stockholders' equity (deficit):

Preferred stock, $ 0.001 par value - 50,000 shares authorized;

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Additional paid-in capital 1,308.8 1,003.5

Retained earnings (accumulated deficit) ( 153.5 ) 164.8

Accumulated deficit ( 1,190.9 ) ( 153.5 )

Accumulated other comprehensive loss ( 131.0 ) ( 78.2 )

Total stockholders' equity attributable to GoDaddy Inc.

Total stockholders' equity (deficit) attributable to GoDaddy Inc.

( 12.9 ) 772.0

Non-controlling interests 1.1 10.1

Total stockholders' equity 782.1 824.5

Total liabilities and stockholders' equity $ 6,301.2 $ 6,083.4

Total stockholders' equity (deficit) ( 11.8 ) 782.1

Total liabilities and stockholders' equity (deficit) $ 6,432.9 $ 6,301.2

See accompanying notes to consolidated financial statements.

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General and administrative 323.8 362.1 334.0

Restructuring charges 43.6 — —

Depreciation and amortization 202.7 209.7 234.1

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Other income (expense), net ( 1.6 ) 22.0 6.9

Income from continuing operations before income taxes 126.4 73.0 106.8

Income (loss) before income taxes ( 495.4 ) 126.4 73.0

Benefit for income taxes 1.3 12.0 9.0

Income from continuing operations 138.4 82.0 125.7

Income from discontinued operations, net of income taxes

Net income 138.4 82.0 139.8

Net income (loss) ( 494.1 ) 138.4 82.0

net income attributable to non-controlling interests 1.0 1.4 4.9

Net income attributable to GoDaddy Inc.

$ 137.0 $ 77.1 $ 136.4

Net income attributable to GoDaddy Inc.

per share of Class A common stock—basic:

Continuing operations $ 0.79 $ 0.50 $ 1.17

Discontinued operations — — 0.08

Net income attributable to GoDaddy Inc.

$ 0.79 $ 0.50 $ 1.25

Net income attributable to GoDaddy Inc.

per share of Class A common stock—diluted:

Continuing operations $ 0.76 $ 0.45 $ 0.71

Discontinued operations — — 0.08

Net income attributable to GoDaddy Inc.

Net income (loss) attributable to GoDaddy Inc.

$ ( 495.1 ) $ 137.0 $ 77.1

Net income (loss) attributable to GoDaddy Inc.

per share of Class A common stock:

Basic $ ( 2.94 ) $ 0.79 $ 0.50

Diluted $ ( 2.94 ) $ 0.76 $ 0.45

Weighted-average shares of Class A common stock outstanding:

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See accompanying notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income

Consolidated Statements of Comprehensive Income (Loss)

(In millions)

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2020 2019 2018

Net income $ 138.4 $ 82.0 $ 139.8

Net income (loss) $ ( 494.1 ) $ 138.4 $ 82.0

Foreign exchange forward contracts gain (loss), net ( 17.6 ) ( 2.7 ) 8.9

Unrealized swap gain (loss), net 0.8 14.2 ( 39.2 )

Unrealized swap gain (loss), net (net of tax effect of $ 2.2 in 2020)

Change in foreign currency translation adjustment ( 44.2 ) 37.7 ( 5.5 )

Comprehensive income 174.2 99.6 4.8

comprehensive income (loss) attributable to non-controlling interests 2.2 8.9 ( 43.2 )

Comprehensive income attributable to GoDaddy Inc.

Comprehensive income (loss) ( 546.8 ) 174.2 99.6

comprehensive income attributable to non-controlling interests 1.1 2.2 8.9

Comprehensive income (loss) attributable to GoDaddy Inc.

$ ( 547.9 ) $ 172.0 $ 90.7

See accompanying notes to consolidated financial statements.

Consolidated Statements of Stockholders' Equity

Consolidated Statements of Stockholders' Equity (Deficit)

(In millions, except shares in thousands)

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Deficit) Accumulated Other Comprehensive Income (Loss) Non-

Interests Total Stockholders'

Interests Total

Shares Amount Shares Amount

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Equity-based compensation — — — — 125.5 — — — 125.5

Sales of Class A common stock, net of issuance costs 721 — — — 21.3 — — — 21.3

Stock option exercises 6,000 — — — 80.9 — — ( 19.8 ) 61.1

Stock option and warrant exercises 4,782 0.1 — — 76.3 — — ( 9.2 ) 67.2

Issuances of Class A common stock under employee stock purchase plan 469 — — — 21.9 — — — 21.9

Repurchases of LLC units — — ( 7,345 ) — ( 275.0 ) — — — ( 275.0 )

Exchanges of LLC units 28,752 — ( 28,752 ) — 27.9 — — ( 27.9 ) —

Liability pursuant to tax receivable agreements resulting from exchanges of LLC Units — — — — ( 73.6 ) — — — ( 73.6 )

Tax receivable agreements liability arising from exchanges — — — — ( 36.2 ) — — — ( 36.2 )

Impact of derivatives, net — — — — — — 23.1 — 23.1

Change in foreign currency translation adjustment — — — — — — ( 5.5 ) — ( 5.5 )

Accumulated other comprehensive income (loss) attributable to non-controlling interests — — — — — — 46.6 ( 46.6 ) —

Vesting of restricted stock units 939 — — — — — — — —

Attribution of accumulated other comprehensive income (loss) — — — — — — ( 4.0 ) 4.0 —

Vesting of restricted stock units and other 1,553 — — — — — — — —

Balance at December 31, 2018 168,549 0.2 6,254 — 699.8 164.8 ( 72.1 ) 31.8 824.5

Consolidated Statements of Stockholders' Equity (continued)

(In millions, except shares in thousands)

Class A Common Stock Class B Common Stock Additional

Capital Retained Earnings (Accumulated

Deficit) Accumulated Other Comprehensive Income (Loss) Non-

Interests Total Stockholders'

Shares Amount Shares Amount

Net income — — — — — 137.0 — 1.4 138.4

Equity-based compensation — — — — 125.5 — — — 125.5

Sales of Class A common stock, net of issuance costs 8 — — — — — — — —

Stock option and warrant exercises 4,782 0.1 — — 76.3 — — ( 9.2 ) 67.2

Equity-based compensation, including amounts capitalized — — — — 149.2 — — — 149.2

Repurchases of Class A common stock ( 7,125 ) — — — — ( 458.6 ) — — ( 458.6 )

Stock option exercises 3,976 — — — 74.9 — — ( 4.2 ) 70.7

Issuances of Class A common stock under employee stock purchase plan 508 — — — 28.5 — — — 28.5

Exchanges of LLC units 4,764 — ( 4,764 ) — 9.1 — ( 2.6 ) ( 6.5 ) —

Liability pursuant to tax receivable agreements resulting from exchanges of LLC Units — — — — ( 36.2 ) — — — ( 36.2 )

Tax receivable agreements liability arising from exchanges — — — — ( 9.7 ) — — — ( 9.7 )

Impact of derivatives, net — — — — — — ( 1.9 ) — ( 1.9 )

Change in foreign currency translation adjustment — — — — — — 37.7 — 37.7

Accumulated other comprehensive income (loss) attributable to non-controlling interests — — — — — — ( 4.0 ) 4.0 —

Vesting of restricted stock units 1,545 — — — — — — — —

Attribution of accumulated other comprehensive income (loss) — — — — — — ( 0.8 ) 0.8 —

Vesting of restricted stock units and other 2,195 — — — — 3.3 — — 3.3

Adjustment to prior period non-controlling interests allocations — — — — 51.7 — ( 38.5 ) ( 13.2 ) —

Balance at December 31, 2019 172,867 0.2 1,490 — 1,003.5 ( 153.5 ) ( 78.2 ) 10.1 782.1

Consolidated Statements of Stockholders' Equity (continued)

Consolidated Statements of Stockholders' Equity (Deficit) (continued)

(In millions, except shares in thousands)

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Deficit) Accumulated Other Comprehensive Income (Loss) Non-

Interests Total Stockholders'

Interests Total

Shares Amount Shares Amount

Impact of adoption of lease accounting standard — — — — — 3.3 — — 3.3

Net income — — — — — 137.0 — 1.4 138.4

Net income (loss) — — — — — ( 495.1 ) — 1.0 ( 494.1 )

Equity-based compensation, including amounts capitalized — — — — 193.9 — — — 193.9

Sales of Class A common stock, net of issuance costs 8 — — — — — — — —

Repurchases of Class A common stock ( 9,986 ) — — — — ( 541.7 ) — — ( 541.7 )

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Exchanges of LLC units 802 — ( 802 ) — 2.2 — ( 2.2 ) —

Liability pursuant to tax receivable agreements resulting from exchanges of LLC Units — — — — ( 9.7 ) — — — ( 9.7 )

Distributions to holders of LLC Units — — — — — — — ( 6.0 ) ( 6.0 )

Impact of derivatives, net — — — — — — ( 8.5 ) — ( 8.5 )

Change in foreign currency translation adjustment — — — — — — ( 44.2 ) — ( 44.2 )

Accumulated other comprehensive income (loss) attributable to non-controlling interests — — — — — — ( 0.8 ) 0.8 —

Vesting of restricted stock units 2,187 — — — — — — — —

Adjustment to prior period non-controlling interests allocations — — — — 51.7 — ( 38.5 ) ( 13.2 ) —

Attribution of accumulated other comprehensive income (loss) — — — — — — ( 0.1 ) 0.1 —

Vesting of restricted stock units and other 2,368 — — — — ( 0.6 ) — — ( 0.6 )

Balance at December 31, 2020 169,157 $ 0.2 688 $ — $ 1,308.8 $ ( 1,190.9 ) $ ( 131.0 ) $ 1.1 $ ( 11.8 )

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Operating activities

Net income $ 138.4 $ 82.0 $ 139.8

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss) $ ( 494.1 ) $ 138.4 $ 82.0

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 202.7 209.7 234.1

Equity-based compensation 191.5 147.0 125.5

Non-cash restructuring charges 29.0 — —

Loss on debt extinguishment — 14.8 —

Tax receivable agreements liability adjustment 674.7 ( 8.7 ) ( 14.9 )

Gain on sale of discontinued operations — — ( 33.2 )

Other 32.7 32.7 ( 11.4 )

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Purchases of intangible assets ( 15.0 ) ( 4.7 ) ( 9.3 )

Net proceeds from sale of discontinued operations, including post-closing adjustments — ( 4.3 ) 447.7

Purchases of property and equipment ( 66.5 ) ( 87.6 ) ( 87.7 )

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Proceeds received from:

Issuance of term loans 746.3 — —

Issuance of Senior Notes — 600.0 —

Stock option exercises 77.7 70.7 67.2

Issuances of Class A common stock under employee stock purchase plan 28.5 21.9 17.4

Debt issued to finance HEG acquisition — — 1,953.1

Sales of Class A common stock, net of issuance costs — — 22.9

Issuance of Class A common stock under employee stock purchase plan 29.6 28.5 21.9

Payments made for:

Repayment of term loans ( 625.0 ) ( 25.0 ) ( 15.3 )

Settlement of tax receivable agreements ( 849.8 ) — —

Repurchases of Class A common stock ( 541.7 ) ( 458.6 ) —

Contingent consideration for business acquisitions ( 54.8 ) ( 10.4 ) ( 1.2 )

Repayment of term loans ( 28.7 ) ( 625.0 ) ( 25.0 )

Financing-related costs ( 6.4 ) ( 13.2 ) —

Repurchases of LLC Units and distributions to holders of LLC Units — — ( 285.0 )

Repayment of HEG acquisition bridge financing — — ( 596.6 )

Contingent consideration for business acquisitions ( 0.5 ) ( 54.8 ) ( 10.4 )

Other financing obligations ( 8.2 ) ( 4.5 ) ( 6.7 )

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Effect of exchange rate changes on cash and cash equivalents 1.8 ( 0.8 ) ( 2.3 )

Net increase in cash and cash equivalents 130.4 349.7 16.6

Net increase (decrease) in cash and cash equivalents ( 297.6 ) 130.4 349.7

Cash and cash equivalents, beginning of period 1,062.8 932.4 582.7

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2020 2019 2018

Supplemental cash flow information:

Cash paid during the period for:

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Income taxes, net of refunds received $ 16.2 $ 6.1 $ 22.8

Supplemental information for non-cash investing and financing activities:

Amounts included in the measurement of operating lease liabilities $ 53.0 $ 50.0 $ —

Supplemental disclosure of non-cash transactions:

Operating lease assets obtained in exchange for operating lease obligations $ 21.0 $ 126.3 $ —

Acquisition date fair value of contingent consideration $ — $ — $ 45.6

Accrued capital expenditures at period end $ 7.4 $ 21.9 $ 7.4

Accrued purchases of property and equipment at period end $ 3.0 $ 7.4 $ 21.9

Landlord paid tenant improvements included in purchases of property and equipment $ 0.5 $ 11.2 $ 4.1

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Business Acquisitions

Sale of Discontinued Operations

Goodwill and Intangible Assets

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Commitments and Contingencies

Restructuring Charges

Defined Contribution Plan

Payable to Related Parties Pursuant to the TRAs

Income Per Share

Payable Pursuant to the TRAs

Income (Loss) Per Share

Geographic Information

Related Party Transactions

Accumulated Other Comprehensive Loss

Selected Quarterly Financial Data (Unaudited)

Subsequent Events

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We deliver simple, easy-to-use cloud-based products and outcome-driven, personalized guidance, which enables our customers to establish a digital presence, connect with their customers and manage their presence.

We are the sole managing member of Desert Newco, LLC and its subsidiaries (Desert Newco), and as a result, we consolidate its financial results and report non-controlling interests representing the economic interests held by its other members.

The calculation of non-controlling interests excludes any net income attributable directly to GoDaddy Inc.

We owned approximately 99 % of Desert Newco's limited liability company units (LLC Units) as of December 31, 2019.

We owned more than 99 % of Desert Newco's limited liability company units (LLC Units) as of December 31, 2020.

Basis of Presentation

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• the relative stand-alone selling price of the indicated performance obligations included in revenue arrangements with multiple performance obligations;

• the estimated reserve for refunds;

• the fair value of assets acquired and liabilities assumed in business acquisitions;

• the fair value of contingent consideration arrangements;

• the assessment of recoverability of long-lived assets;

• the estimated reserve for refunds;

• the estimated useful lives of intangible and depreciable assets;

• the grant date fair value of equity-based awards;

• the fair value of financial instruments;

• the recognition, measurement and valuation of current and deferred income taxes;

• the recognition and measurement of amounts payable under tax receivable agreements (TRAs);

• the recognition and measurement of loss contingencies, indirect tax liabilities and certain accrued liabilities.

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Property and equipment is stated at cost.

Depreciation is recorded over the shorter of the estimated useful life or the lease term of the applicable assets using the straight-line method beginning on the date an asset is placed in service.

We regularly evaluate the estimated remaining useful lives of our property and equipment to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation.

Maintenance and repairs are charged to expense as incurred.

Depreciation is recorded over the estimated useful lives of the applicable assets using the straight-line method beginning on the date an asset is placed in service.

We regularly evaluate the estimated useful lives to determine whether events or changes in circumstances warrant a revision to the remaining period of depreciation.

Property and equipment consisted of the following:

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Costs related to the design or maintenance of internal-use software are included in technology and development expenses as incurred.

During 2019, we capitalized $ 13.4 million of such costs to property and equipment.

Capitalized costs were not material in 2018.

We capitalized $ 9.9 million and $ 13.4 million of such costs to property and equipment during 2020 and 2019, respectively.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations.

Indefinite-lived intangible assets consist of the GoDaddy trade names and branding and our domain portfolio.

Indefinite-lived intangible assets consist of the GoDaddy trade names and branding, our domain portfolio and certain contractual-based assets.

Goodwill and indefinite-lived intangible assets are not amortized to earnings, but are assessed for impairment at least annually.

As individual domains are sold, our indefinite-lived domain portfolio intangible asset is reduced by the allocated carrying cost of each domain, which is included in cost of revenue.

We assess impairment annually for our single reportable segment and our indefinite-lived trade names and branding during the fourth quarter of each year.

We also perform an assessment at other times if events or changes in circumstances indicate the carrying value of the assets may not be recoverable.

Goodwill in our single reportable segment is assessed for impairment annually during the fourth quarter of each year.

We also perform an assessment at other times if events or changes in circumstances indicate the carrying value may not be recoverable.

If, based on qualitative analysis, we determine it is more-likely-than-not the fair value of our reporting unit is less than its carrying amount, a quantitative impairment test is performed.

Our qualitative analysis did not indicate impairment during any of the periods presented.

Our indefinite-lived domain portfolio is reviewed for impairment annually during the fourth quarter of each year.

We also perform an assessment at other times if events or changes in circumstances indicate the carrying amount of the asset may not be fully recoverable.

Any identified impairment loss is treated as a permanent reduction in the carrying amount of the asset.

We did not record an impairment loss during any of the periods presented.

Our qualitative analysis did not indicate impairment of our goodwill during any of the periods presented.

Our indefinite-lived trade names and branding, domain portfolio and contractual-based assets are reviewed for impairment annually during the fourth quarter of each year.

We also perform assessments at other times if events or changes in circumstances indicate the carrying amounts of these assets may not be fully recoverable.

Any identified impairment losses are treated as permanent reductions in the carrying amounts of the assets.

Our qualitative analysis did not indicate impairment of our indefinite-lived assets during any of the periods presented.

Long-Lived and Finite-Lived Intangible Assets

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Any write-downs are treated as permanent reductions in the carrying amount of the respective asset.

Our analysis did not indicate impairment during any of the periods presented, and accordingly, we did not record any impairment loss.

Our analysis did not indicate impairment during any of the periods presented.

Debt Issuance Costs

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We do not enter into derivative transactions for speculative or trading purposes.

Our derivative financial instruments include foreign exchange forward contracts with financial institutions to hedge certain forecasted sales transactions denominated in currencies other than the United States (U.S.) dollar.

In addition, we have entered into an interest rate swap on a portion of our long-term debt and a cross-currency swap on certain of our intercompany debt to manage the variability of cash flows due to movements in interest rates and foreign currency exchange rates.

We have designated each of these instruments as a cash flow hedge.

We utilize a variety of derivative instruments, all of which are designated as cash flow hedges.

We expect each derivative instrument qualifying for hedge accounting will be highly effective at reducing the risk associated with the exposure being hedged.

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We lease office and data center space in various locations.

Prior to our adoption of the new lease standard on January 1, 2019, rent expense under operating leases was recognized on a straight-line basis over the lease term taking into consideration rent abatements, scheduled rent increases and any lease incentives.

Adoption of New Standard on Leases

On January 1, 2019, we adopted the Financial Accounting Standards Board's (FASB) new lease accounting standard using a modified retrospective transition and recorded a $ 3.3 million cumulative-effect adjustment to beginning retained earnings (the effective date method).

Under the effective date method, comparative period financial information is not adjusted.

The new standard requires lessees to recognize a right-of-use (ROU) asset and lease liability on the balance sheet for operating

leases while the accounting for finance leases is substantially unchanged.

We recognized $ 111.3 million and $ 108.0 million of additional assets and liabilities, respectively, upon adoption of the new standard.

The impact to deferred taxes was immaterial.

The increases to assets and liabilities resulting from the recognition of ROU assets and operating lease liabilities included the derecognition of existing assets and liabilities related to leases.

The most significant impact resulted from the derecognition of our lease financing obligation and related building asset.

At adoption, we were required to reassess whether the failed sale-leaseback transaction that resulted in our previous recognition of a lease financing obligation and related building asset would have met the sale criteria under the new standard.

We concluded that the sale criteria would have been met and recognized a $ 3.3 million adjustment to beginning retained earnings as a result of the derecognition of the lease financing obligation and related building asset.

The previously recognized lease financing obligation is now classified as an operating lease and was included in the initial measurement of the ROU assets and operating lease liabilities.

We have adopted the package of practical expedients allowing us to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs.

Adoption of this standard did not have a material impact to our statements of operations or cash flows.

We determine whether a contract contains a lease at contract inception.

We have lease agreements with lease and non-lease components and have elected the practical expedient to account for such components as a single lease component.

This election must be made by class of underlying asset and was elected for our leases of office space, data center space and server equipment.

We have lease agreements with lease and non-lease components and have elected to account for such components as a single lease component.

This election is made by class of underlying asset and was elected for our leases of office space, data center space and server equipment.

We initially recognize and measure contracts containing a lease and determine lease classification at commencement.

ROU assets and operating lease liabilities are measured based on the estimated present value of lease payments over the lease term.

Right-of-use (ROU) assets and operating lease liabilities are measured based on the estimated present value of lease payments over the lease term.

In determining the present value of lease payments, we use our estimated incremental borrowing rate when the rate implicit in the lease cannot be readily determined.

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Assets and liabilities associated with finance leases are included in property and equipment, net, accrued expenses and other current liabilities and other long-term liabilities.

See Note 12 for additional information regarding leases.

Prior to January 1, 2019, rent expense under operating leases was recognized on a straight-line basis over the lease term taking into consideration rent abatements, scheduled rent increases and any lease incentives.

Foreign Currency

Our functional and reporting currency is the U.S.

Assets denominated in foreign currencies are remeasured into U.S.

dollars at period-end exchange rates.

Assets denominated in foreign currencies are remeasured into United States (U.S.) dollars at period-end exchange rates.

Foreign currency-based revenue and expense transactions are measured at transaction date exchange rates.

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Our revenue is categorized and disaggregated as reflected in our statements of operations, as follows:

Domains revenue primarily consists of domain registrations and renewals, domain privacy, domain application fees, domain back-orders, aftermarket domain sales and fee surcharges paid to ICANN.

Domains revenue primarily consists of domain registrations and renewals, aftermarket domain sales, domain add-ons such as domain protection and fee surcharges paid to ICANN.

Consideration is recorded as deferred revenue when received, which is typically at the time of sale, and revenue, other than for aftermarket domain sales, is recognized ratably over the period in which the performance obligations are satisfied, which is generally over the contract term.

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The determination of gross or net revenue recognition is reviewed on a product-by-product basis and is dependent on our determination as to whether we act as principal or agent in the transaction.

Revenue associated with sales through our network of resellers, for certain aftermarket domain sales and for third-party offerings is recorded on a gross basis as we have determined that we control the product before transferring it to our end customers.

Revenue associated with sales through our network of resellers, for certain aftermarket domain sales and for third-party offerings is generally recorded on a gross basis as we have determined that we control the product before transferring it to our end customers.

Assets Recognized from Contract Costs

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Equity-Based Compensation

We grant stock options at exercise prices equal to the fair market value of our Class A common stock on the grant date.

We grant both options and restricted stock units (RSUs) vesting solely upon the continued service of the recipient as well as awards vesting upon the achievement of annual or cumulative financial-based targets (PSUs).

We have granted stock options at exercise prices equal to the fair market value of our Class A common stock on the grant date.

We have granted both options and restricted stock units (RSUs) vesting solely upon the continued service of the recipient as well as performance-based awards (PSUs) with vesting based on either (i) our achievement of specified financial targets or (ii) our relative total stockholder return (TSR) as compared to a selected index of public internet companies.

We recognize the accounting grant date fair value of equity-based awards as compensation expense over the required service period of each award, taking into account the probability of our achievement of associated performance targets.

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For awards subject to graded vesting, we recognize expense separately for each vesting tranche.

We also estimate when and if PSUs will be earned.

If an award is not considered probable of being earned, no amount of expense is recognized.

If the award is deemed probable of being earned, expense is recorded over the estimated service period.

We regularly estimate when and if PSUs will be earned and record expense over the estimated service period only for awards considered probable of being earned.

Any previously recognized expense is reversed in the period in which an award is determined to no longer be probable of being earned.

On the settlement date of each three-year performance period associated with our TSR-based PSU grants, and only if a participant remains a Service Provider (as defined in the 2015 Equity Incentive Plan) on such date, a participant will receive shares of our Class A common stock ranging from 0 % to 200 % of the originally granted PSUs based on our relative TSR as compared to the companies within the selected index.

Vesting of the PSUs is subject to the TSR market condition as well as approval of the performance by our board of directors following the end of each performance period.

Equity-based awards are accounted for using the fair value method.

RSUs and PSUs are measured based on the fair market value of the underlying common stock on their respective accounting grant dates.

Grant date fair values for options are determined using the Black-Scholes option pricing model and a single option award approach.

Grant date fair values for stock options are determined using the Black-Scholes option pricing model and a single option award approach.

The accounting grant date for PSUs is the date on which the applicable performance criteria are approved by our board of directors (the Board).

The fair value of shares issued under our employee stock purchase plan is estimated on the first day of each offering period using the Black-Scholes option pricing model.

We utilize an estimate of future award forfeitures, which is based on historical data, in our equity-based compensation expense calculations.

We regularly estimate when and if PSUs will be earned and record expense only for awards considered probable of being earned.

Key assumptions used in the determination of fair value for options are as follows:

We utilize an estimated forfeiture rate in our equity-based compensation expense calculations, which is based on an analysis of historical data.

The cumulative effect of any changes to the forfeiture rate is recognized in the period in which the estimate is changed.

Key assumptions used in the determination of fair value for stock options are as follows:

Expected term.

The expected term represents the period the options are expected to be outstanding.

Because of the lack of sufficient historical data necessary to calculate the expected term, we use the simple average of the vesting period and the contractual term to estimate the expected term.

Because of the lack of sufficient historical data, we use the simple average of the vesting period and the contractual term to estimate the period the stock options are expected to be outstanding.

Expected volatility.

We determine the expected stock price volatility based on the historical volatility of our Class A common stock and the historical volatilities of a peer group.

Industry peers consist of several public companies in the technology industry similar to us in size, stage of life cycle and financial leverage.

We intend to continue to consistently apply this process using the same or similar public companies until a sufficient trading history of our Class A common stock becomes available.

If circumstances change such that the identified companies are no longer similar to us, we will revise our peer group to substitute more suitable companies in this calculation.

We determine the expected stock price volatility based on the historical volatility of our Class A common stock and the historical volatilities of an industry peer group.

Expected dividend yield.

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Treasury bond with a maturity equal to the expected term of the option on the grant date.

The fair value of options granted was estimated using the following weighted-average assumptions:

The fair value of stock options granted was estimated using the following weighted-average assumptions:

Year Ended December 31,

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Risk-free interest rate 0.9 % 2.2 % 2.7 %

We estimate the grant-date fair value of the TSR-based PSUs using a Monte Carlo simulation which requires assumptions for expected volatility, risk-free rate of return and dividend yield.

Expected volatilities for GoDaddy and the companies within the index are derived using historical volatilities over a period equal to the length of the performance period.

We base the risk-free rate of return on the yield of a zero-coupon U.S.

Treasury bond with a maturity equal to the performance period, and assume a 0 % dividend rate.

Equity-based compensation expense for these PSUs is recognized over the requisite service period, regardless of whether the TSR market condition is satisfied.

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets (DTAs) and liabilities (DTLs) for the expected future tax consequences of events included in the financial statements.

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Interest and penalties related to income taxes are included in benefit (provision) for income taxes, and were not material during any of the periods presented.

Payable to Related Parties Pursuant to the TRAs

Concurrent with the completion of our initial public offering (IPO) in 2015, we became a party to five TRAs with our pre-IPO owners.

Under four of the TRAs, we are generally required to pay to certain pre-IPO owners approximately 85 % of the amount of calculated tax savings, if any, we are deemed to realize (using the actual applicable U.S.

federal income tax rate and an assumed combined state and local income tax rate) as a result of (1) any existing tax attributes associated with LLC Units acquired in the pre-IPO organizational transactions, the benefit of which is allocable to us as a result of such transactions (including the allocable share of Desert Newco's existing tax basis in its assets), (2) net operating loss (NOL) carryforwards available as a result of such transactions and (3) tax benefits related to imputed interest.

Under the fifth of these agreements, we are generally required to pay our other pre-IPO owners of approximately 85 % of the amount of the calculated tax savings, if any, we are deemed to realize (using the actual applicable U.S.

federal income tax rate and an assumed combined state and local income tax rate) as a result of (1) any step-up in tax basis created as a result of exchanges of their LLC Units (together with the corresponding shares of Class B common stock) for shares of our Class A common stock, (2) any existing tax attributes associated with their LLC Units, the benefit of which is allocable to us as a result of such exchanges (including the allocable share of Desert Newco's existing tax basis in its assets), (3) tax benefits related to imputed interest and (4) payments under the TRAs.

When LLC Units are exchanged, we receive certain tax attributes, including the original basis adjustments (the OBAs) created from the original acquisition of the LLC Units plus any anticipated basis adjustments.

The OBAs entitle us to the depreciation and amortization previously allocable to the original owner of such units.

The anticipated basis adjustments will increase, for tax purposes, our depreciation and amortization deductions.

To the extent these deductions are used to reduce our taxable income, thereby resulting in actual tax savings, we will be required to pay the original owners approximately 85 % of such savings, which is recorded as an additional liability under the TRAs when deemed probable.

Adjustments to the liability under the TRAs based on changes in anticipated future taxable income are recorded in our statements of operations.

Unutilized depreciation and amortization deductions related to the OBAs and the anticipated basis adjustments are converted to NOL carryforwards.

If the utilization is considered to be more-likely-than-not, a liability under the TRAs relating to NOL carryforwards is recorded.

Fair Value Measurements

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Cash and cash equivalents:

Reverse repurchase agreements (1)

$ — $ 70.0 $ — $ 70.0

Commercial paper — 102.0 — 102.0

Money market funds and time deposits 444.0 — — 444.0

Short-term investments:

Commercial paper and other 0.7 22.9 — 23.6

Money market funds $ 98.0 $ — $ — $ 98.0

Total assets measured and recorded at fair value $ 98.0 $ — $ — $ 98.0

Contingent consideration liabilities $ — $ — $ 2.6 $ 2.6

Derivative liabilities $ — $ 216.4 $ — $ 216.4

Total liabilities measured and recorded at fair value $ — $ 216.4 $ — $ 216.4

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(1) Reverse repurchase agreements include a $ 70.0 million repurchase agreement with Morgan Stanley, callable with 31 days notice.

December 31, 2019

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Total assets measured and recorded at fair value $ 444.7 $ 194.9 $ — $ 639.6

Contingent consideration liabilities $ — $ — $ 67.9 $ 67.9

Derivative liabilities $ — $ 93.8 $ — $ 93.8

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(1) Reverse repurchase agreements include a $ 70.0 million repurchase agreement with Morgan Stanley, callable with 31 days notice.

Our contingent consideration liabilities, which relate to future earn-out payments associated with our business acquisitions, are classified within Level 3 and valued using discounted cash flow valuation methods encompassing significant unobservable inputs.

The inputs include estimated operating results scenarios for the applicable performance periods, probability weightings assigned to operating results scenarios (generally assessed at 100 % probability) and the discount rates applied (generally ranging from 14 % to 25 %).

The fair values of our contingent consideration arrangements are sensitive to changes in forecasts and discount rates.

A reconciliation of these liabilities is as follows:

Year Ended December 31,

Balance at beginning of period $ 67.9 $ 20.7

Acquisition date fair value of contingent consideration — 45.6

Adjustments to fair value recognized in earnings 2.6 11.9

Contingent consideration payments ( 68.2 ) ( 11.2 )

Impact of foreign currency translation and other 0.3 0.9

Balance at end of period $ 2.6 $ 67.9

We have no other material assets or liabilities measured at fair value on a recurring basis.

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We have internal procedures to restore products in the event of a service disruption or disaster at any of our data center facilities.

We serve our customers and users from data center facilities operated either by us or third parties, which are located in Arizona, California, Missouri, Virginia, New York, France, Germany, the Netherlands, Singapore and the United Kingdom (U.K.).

We serve our customers and users from data center facilities operated either by us or third parties, which are most significantly located in Arizona, California, Virginia, France, the Netherlands and Singapore.

Even with these procedures for disaster recovery in place, the availability of our products could be significantly interrupted during the implementation of restoration procedures.

Recent Accounting Pronouncements

In June 2016, the FASB issued new guidance for the accounting for credit losses on instruments that will require entities to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts.

In June 2016, the Financial Accounting Standards Board (FASB) issued new guidance requiring all expected credit losses for financial instruments held at the reporting date to be measured based on historical experience, current conditions and reasonable supportable forecasts.

This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial instruments measured at amortized cost and also applies to some off-balance sheet credit exposures.

We do not expect our adoption of this guidance on January 1, 2020 to have a material impact.

In January 2017, the FASB issued new guidance simplifying the goodwill impairment test, eliminating the requirement for an entity to determine the fair value of its assets and liabilities (including unrecognized assets and liabilities) at the impairment testing date following the procedure that would be required in determining the fair value of assets acquired and

liabilities assumed in a business combination.

Instead, an entity will be required to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.

An entity will be required to recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value;

however, the loss recognized should not exceed the total amount of goodwill allocated to the reporting unit.

Our adoption of this guidance on January 1, 2019 did not have a material impact.

Our adoption of this guidance on a modified retrospective basis on January 1, 2020 did not have a material impact as credit losses have not been, and are not expected to be, significant based on historical collection trends, the financial condition of payment partners and external market factors.

In August 2018, the FASB issued new guidance to modify or eliminate certain fair value disclosures and require additional disclosures for Level 3 measurements.

We do not expect our adoption of this guidance on January 1, 2020 to have a material impact.

Our adoption of this guidance on January 1, 2020 did not have a material impact.

In August 2018, the FASB issued new guidance aligning the accounting for implementation costs incurred in cloud computing arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

We plan to adopt this guidance prospectively on January 1, 2020 and do not expect a material impact at adoption.

We adopted this guidance on a prospective basis on January 1, 2020.

Amounts capitalized have not been material.

In December 2019, the FASB issued new guidance to simplify the accounting for income taxes primarily by eliminating certain exceptions allowable under the existing guidance related to the approach for intraperiod tax allocations, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

The guidance is effective for annual and interim reporting periods beginning after December 15, 2020, with early adoption permitted.

We are currently evaluating the timing of our adoption and the expected impact of this new guidance.

Our adoption of this guidance on January 1, 2020 did not have a material impact.

In March 2020, the FASB issued guidance providing temporary optional expedients and exceptions to ease the financial reporting burden of the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates.

The guidance is applicable to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met and to other derivative instruments if there is a change in the interest rate used for discounting, margining and contract price alignment.

The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022.

We continue to evaluate our contractual arrangements and hedging relationships that reference LIBOR.

Business Acquisitions

2020 Acquisitions

In August 2020, we completed the acquisition of the registry operations of Neustar Inc.

for total purchase consideration consisting of $ 217.2 million in cash, of which $ 1.3 million will be paid in 2021, and the settlement of $ 19.4 million in pre-existing contractual relationships related to prepaid domain name registry fees.

This acquisition was completed to expand our domains offerings and capabilities on an established registry technology platform.

During 2020, we completed three other acquisitions for aggregate purchase consideration of $ 219.2 million in cash, of which $ 10.2 million is payable in future periods upon expiration of the respective contractual holdback periods.

The aggregate purchase price of these four acquisitions was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of each acquisition date, with the excess recorded to goodwill.

The recognition of goodwill, of which approximately $ 92.0 million is deductible for income tax purposes, was made based on strategic benefits we expect to realize from the acquisitions.

During the measurement periods, which will not exceed one year from each closing, we will continue to obtain information, primarily related to income taxes, to assist us in finalizing the acquisition date fair values.

Any qualifying changes to our preliminary estimates will be recorded as adjustments to the respective assets and liabilities, with any residual amounts allocated to goodwill.

The following table summarizes the estimated acquisition date fair values of the aggregate assets acquired and liabilities assumed:

Total purchase consideration $ 455.8

Fair value of assets acquired and liabilities assumed:

Cash and cash equivalents 4.5

Domain portfolio indefinite-lived intangible assets 88.5

Contractual-based indefinite-lived intangible assets 67.0

Finite-lived intangible assets 96.2

Deferred revenue ( 17.1 )

Other assets and liabilities, net ( 20.6 )

Total assets acquired, net of liabilities assumed 218.5

Goodwill $ 237.3

The identified intangible assets, which were valued using income-based approaches, primarily consist of an indefinite-lived domain portfolio, contractual-based assets, developed technology and customer relationships.

The acquired finite-lived intangible assets have a total weighted-average amortization period of 5.5 years.

Pro forma financial information is not presented because these acquisitions were not material to our financial statements, either individually or in the aggregate.

2018 Acquisition of Main Street Hub

In July 2018, we completed the acquisition of Main Street Hub (MSH), a social media and reputation management company, for total purchase consideration of $ 182.0 million, including contingent earn-out payments of up to a maximum of $ 50.0 million subject to the achievement of certain revenue and operational milestones.

In July 2018, we completed the acquisition of Main Street Hub, a social media and reputation management company, for total purchase consideration of $ 182.0 million, including contingent earn-out payments of up to a maximum of $ 50.0 million subject to the achievement of certain revenue and operational milestones.

The acquisition was completed to further our professional services strategy for our customers.

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The recognition of goodwill, none of which is deductible for income tax purposes, was made based on the strategic and synergistic benefits we expect to realize from the acquisition.

The following table summarizes the final estimated acquisition date fair values of the MSH assets acquired and liabilities assumed:

The following table summarizes the final estimated acquisition date fair values of the assets acquired and liabilities assumed:

Total purchase consideration $ 182.0

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The acquired finite-lived intangible assets have a total weighted-average amortization period of 4.3 years.

2017 Acquisition of Host Europe Holdings Limited

In April 2017, we completed the acquisition of Host Europe Holdings Limited (HEG), a U.K.-based provider of domains, website hosting, applications hosting and managed hosting to small and medium-sized customers throughout Europe.

Pursuant to the terms of the purchase agreement, we purchased all of the outstanding shares of HEG and certain loan notes issued by Host Europe Finance Co.

for total consideration transferred of € 1.7 billion.

We funded the acquisition with debt financing, as described in Note 10, and incurred $ 18.6 million in nonrecurring transaction costs in connection with the acquisition, which were recognized within general and administrative expense.

As a result of the acquisition, HEG became our wholly-owned subsidiary.

We believe the acquisition allowed us to leverage HEG's existing footprint to accelerate our expansion in Europe through the delivery of a broader range of cloud-based products.

Our operating results include HEG's results from the closing date.

The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill.

The recognition of goodwill, none of which is deductible for income tax purposes, was made based on the strategic and synergistic benefits we expect to realize from the acquisition.

The following table summarizes the final estimated acquisition date fair values of the HEG assets acquired and liabilities assumed:

Total purchase consideration (1)

Fair value of assets acquired:

Cash and cash equivalents 27.2

Other current assets 66.3

Assets held for sale (2)

Property and equipment, net 61.9

Intangible assets, net 595.7

Other assets 9.3

Amount attributable to assets acquired 1,257.9

Fair value of liabilities assumed:

Accounts payable and accrued expenses 65.1

Current portion of deferred revenue 45.5

Liabilities directly associated with the assets held for sale (2)

Other long-term liabilities 14.0

Deferred tax liabilities 177.6

Amount attributable to liabilities assumed 395.2

Goodwill $ 986.8

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(1) The purchase consideration was translated using the Euro to U.S.

dollar exchange rate in effect on the closing date of approximately 1.066 .

(2) Assets held for sale, and liabilities directly associated with the assets held for sale, represented those of HEG's PlusServer managed hosting business (PlusServer), which met the criteria for held for sale designation at the acquisition date and was sold in August 2017.

See Note 4 for further discussion.

The purchase price allocation to identifiable finite-lived intangible assets acquired was as follows:

Finite-lived Intangible Assets Estimated

Trade names 10 years $ 75.2

Developed technology 6 years 62.4

Customer relationships 9 years 458.1

We valued trade names and developed technology by applying the relief-from-royalty method, which is a variation of the income approach.

Customer relationships were valued using the multi-period excess earnings method under the income approach.

We determined the assumptions used in developing these valuations based on our future plans, historical data, current and anticipated market conditions, estimated growth rates and market comparables.

The acquired finite-lived intangible assets have a total weighted-average amortization period of 8.8 years.

Property and equipment was valued using the cost approach.

Deferred revenue was valued using the income approach.

Estimated DTLs primarily represent the expected future tax consequences of temporary differences between the fair values of the assets acquired and liabilities assumed and their respective tax bases.

In 2017, HEG contributed approximately $ 155.1 million of our total revenue and a net loss of approximately $ 17.2 million within our income from continuing operations.

Other 2017 Acquisition

In April 2017, we completed an acquisition for consideration consisting of cash of $ 45.7 million, $ 9.0 million payable in future periods upon expiration of the contractual holdback period, $ 15.0 million of time-based milestone payments and additional contingent earn-out payments of up to $ 15.0 million subject to the achievement of certain revenue and integration milestones.

We recognized a liability of $ 33.7 million representing the estimated aggregate acquisition-date fair value of the future payments.

The aggregate purchase price was allocated based upon our assessment of acquisition-date fair values with $ 63.5 million allocated to goodwill, none of which is tax deductible, $ 28.5 million to identified finite-lived intangible assets and $ 12.6 million of net liabilities assumed.

Identified finite-lived intangible assets, which were valued using income-based approaches, consist of developed technology, customer relationships and trade names.

The acquired finite-lived intangible assets have a total weighted-average amortization period of 5.5 years.

The acquisition was not material to our results of operations.

Other Acquisition-Related Payments

During 2019, 2018 and 2017, we made $ 88.0 million, $ 21.7 million and $ 10.8 million of aggregate holdback and contingent consideration payments related to prior acquisitions.

Sale of Discontinued Operations

In connection with the HEG acquisition, we committed to a formal plan to sell PlusServer as its business model differed from ours.

The operating results of PlusServer from the acquisition date to the date of its sale are reported within discontinued operations.

On August 31, 2017, we sold all of the outstanding shares of PlusServer, receiving net proceeds of $ 447.7 million.

As a result of the sale, we recorded a gain on disposal of $ 33.2 million in 2017, which is included in income from discontinued operations and includes the reclassification of the associated cumulative translation adjustment on PlusServer's net assets.

During 2020, 2019 and 2018, we made $ 6.8 million, $ 88.0 million and $ 21.7 million of aggregate holdback and contingent consideration payments related to business acquisitions, respectively.

Goodwill and Intangible Assets

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Balance at December 31, 2020 $ 3,275.1

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(1) Includes immaterial measurement period adjustments related to acquisitions completed in 2017.

Intangible assets, net are summarized as follows:

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Domain portfolio 250.3 n/a 250.3

Contractual-based assets 67.0 n/a 67.0

Finite-lived intangible assets:

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$ 1,664.4 $ ( 566.7 ) $ 1,097.7

During 2017, we completed three purchases of intangible assets for $ 52.0 million in cash.

The assets purchased consisted of $ 50.5 million in indefinite-lived domain portfolios and $ 1.5 million in customer-related intangible assets.

The purchased customer-related intangible assets were valued at cost and are being amortized over 36 months.

Transaction costs were immaterial and were expensed as incurred.

In December 2020, we completed the purchase of a domain portfolio for $ 17.0 million in cash, of which $ 2.0 million will be paid in 2021.

Amortization expense was $ 127.1 million, $ 119.5 million and $ 136.7 million during 2020, 2019 and 2018, respectively.

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Holders of Class A and Class B common stock are entitled to one vote per share and, except as otherwise required, will vote together as a single class on all matters on which stockholders generally are entitled to vote.

We are required to, at all times, maintain (i) a one-to-one ratio between the number of shares of Class A common stock outstanding and the number of LLC Units owned by us and (ii) a one-to-one ratio between the number of shares of Class B common stock and LLC Units owned by Desert Newco's pre-IPO owners.

We may issue shares of Class B common stock only to the extent necessary to maintain these ratios.

Shares of Class B common stock are transferable only together with an equal number of LLC Units if we, at the election of a pre-IPO owner, exchange LLC Units for shares of Class A common stock.

Secondary Offerings and LLC Unit Repurchase

We have completed several underwritten public offerings in which certain stockholders, including Kohlberg Kravis Roberts & Co.

(KKR), Silver Lake Partners (SLP), Technology Crossover Ventures (TCV) and YAM Special Holdings, Inc.

(YAM) and certain of our executive officers sold shares of our Class A common stock.

We did not receive any proceeds from the shares sold by the selling stockholders in these offerings.

We used the net proceeds from the shares sold by us to pay expenses incurred in connection with the offerings.

Each offering included the exchange of LLC Units (together with the corresponding shares of Class B common stock) for Class A common stock by the selling stockholders, which resulted in increases in additional paid-in capital, with offsetting reductions in non-controlling interests, and material increases to the liability under the TRAs (see Note 16).

Significant details for each offering are as follows:

Offering Date Offering Price Per Share ($) Shares Sold by GoDaddy (#) Gross Proceeds Received by GoDaddy ($) Aggregate Shares Sold by Selling Stockholders (#) LLC Units Exchanged by Selling Stockholders (#) Increase in Additional Paid-in Capital ($)

February 2019 (1)

75.40 8 0.6 8,539 4,278 5.7

August 2018 (2)

75.75 8 0.6 10,391 7,405 7.8

May 2018 70.73 — — 11,625 8,052 7.6

March 2018 59.21 — — 16,916 12,821 11.2

December 2017 (3)

47.32 50 2.4 7,228 4,689 4.7

September 2017 44.00 50 2.2 20,000 13,774 10.8

May 2017 38.50 100 3.7 27,615 16,701 10.8

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(1) Following the February 2019 secondary offering, KKR and SLP no longer owned shares of GoDaddy's common stock.

(2) Following the August 2018 secondary offering, YAM no longer owned shares of GoDaddy's common stock.

(3) Following the December 2017 secondary offering, TCV no longer owned shares of GoDaddy's common stock.

In May 2017, we repurchased 7,345 LLC units from KKR, SLP, TCV and YAM for an aggregate of $ 275.0 million, or $ 37.44 per share, which is the same per share price, net of discounts and commissions, paid by the underwriters to the selling stockholders in the May 2017 secondary offering.

In connection with this repurchase, the corresponding shares of Class B common stock were canceled.

In May 2017, we also sold an aggregate of 521 shares of Class A common stock to certain executives for total proceeds of $ 19.2 million.

We are required to, at all times, maintain (i) a one-to-one ratio between the number of shares of Class A common stock outstanding and the number of LLC Units held by us and (ii) a one-to-one ratio between the number of shares of Class B common stock outstanding and the number of LLC Units held by Desert Newco's other owners.

Shares of Class B common stock are transferable only together with an equal number of LLC Units if we, at the election of an owner, exchange LLC Units for shares of Class A common stock.

Share Repurchase Programs

In November 2018, our Board approved a share repurchase program pursuant to which we may repurchase up to $ 500.0 million of our Class A common stock (the 2018 Share Repurchase Program).

During 2019, we repurchased a total of 7,125 shares of our Class A common stock in the open market pursuant to the 2018 Share Repurchase Program for an aggregate purchase price of $ 458.6 million, including commissions.

In October 2019, our Board approved an additional share repurchase program pursuant to which we may repurchase up to $ 500.0 million of our Class A common stock (the 2019 Share Repurchase Program).

As of December 31, 2019, we have not repurchased any shares under the 2019 Share Repurchase Program.

Under each of these repurchase programs, we may purchase shares from time to time in open market purchases, block transactions and privately negotiated transactions, in accordance with applicable federal securities laws.

Our Board has approved certain share repurchase programs allowing us to purchase shares of our Class A common stock from time to time in open market purchases, block transactions and privately negotiated transactions, in accordance with applicable federal securities laws.

The programs have no time limits, do not obligate us to make any repurchases and may be modified, suspended or terminated by us at any time without prior notice.

The amount and timing of repurchases are subject to a variety of factors including liquidity, share price, market conditions and legal requirements, and will be funded by available cash and cash equivalents.

The amount and timing of repurchases are subject to a variety of factors including liquidity, share price, market conditions and legal requirements.

Repurchased shares are immediately retired and returned to an unissued status.

We have elected to record the excess of the repurchase price over par value as a charge to retained earnings (accumulated deficit).

As of December 31, 2020, we had the following approved share repurchase programs:

Board Approval Date Total Authorized Amount (1) ($)

Authorized Amount Remaining ($)

May 2020 500.0 500.0

October 2019 500.0 —

November 2018 500.0 —

_________________________________

(1) The authorized amounts exclude commissions applicable to any repurchases.

Pursuant to these programs, we made the following open market repurchases of our Class A common stock:

Year Ended December 31, Number of Shares Repurchased (#) Aggregate Purchase Price (1) ($)

2020 9,986 541.7

2019 7,125 458.6

_________________________________

(1) The aggregate purchase price includes commissions paid in connection with the repurchases.

Equity-Based Compensation Plans

On March 31, 2015, we adopted the 2015 Equity Incentive Plan (the 2015 Plan) and reserved a total of 10,285 shares of Class A common stock for issuance thereunder.

The shares reserved for issuance under the 2015 Plan also included up to 28,133 shares rolled over from our previous equity plan and from certain other option plans assumed in connection with acquisitions.

The number of shares reserved for issuance are increased automatically each year by a number equal to the least of (i) 20,571 shares, (ii) 4 % of the total shares of all classes of common stock outstanding as of the last day of the preceding year or (iii) such other amount as may be determined by our Board.

On January 1, 2019, an additional 6,992 shares were reserved for issuance pursuant to the 2015 Plan.

As of December 31, 2019, 23,363 shares were available for issuance as future awards under the 2015 Plan.

On March 31, 2015, we adopted the 2015 Employee Stock Purchase Plan (the ESPP) and reserved a total of 2,000 shares of Class A common stock for issuance thereunder.

The number of shares reserved for issuance are increased automatically each year by a number equal to the least of (i) 1,000 shares, (ii) 1 % of the total shares of all classes of common stock outstanding as of the last day of the preceding year or (iii) such other amount as may be determined by our Board.

On January 1, 2019, an additional 1,000 shares were reserved for issuance pursuant to the ESPP.

As of December 31, 2019, 3,575 shares were available for issuance under the ESPP.

Equity-Based Compensation Expense Error

During 2019, we determined that we had previously recognized equity-based compensation expense related to certain PSUs prior to the establishment of a grant date for accounting purposes.

The error is comprised of $ 3.0 million, $ 5.7 million and $ 6.9 million recognized in 2016, 2017 and 2018, respectively.

We determined the amounts related to the prior period financial statements and disclosures were immaterial considering both quantitative and qualitative factors.

Accordingly, we reversed the cumulative amount as a reduction of equity-based compensation expense in 2019.

On March 31, 2015, we adopted the 2015 Equity Incentive Plan (the 2015 Plan).

On January 1, 2020, an additional 6,794 shares of our Class A common stock were reserved for issuance under the automatic increase provisions of the 2015 Plan, and as of December 31, 2020, 27,340 shares were available for issuance as future awards under the plan.

On March 31, 2015, we adopted the 2015 Employee Stock Purchase Plan (the ESPP).

On January 1, 2020, an additional 1,000 shares of our Class A common stock were reserved for issuance under the automatic increase provisions of the ESPP, and as of December 31, 2020, 4,081 shares were available for issuance under the plan.

Equity Plan Activity

The following table summarizes option activity:

The following table summarizes stock option activity:

Shares of Class A Common Stock (#) Weighted-

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Vested at December 31, 2020 2,458 33.90 5.2 120.6

The following table summarizes RSU and PSU activity:

The following table summarizes stock award activity:

Shares of Class A Common Stock (#)

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(1) Includes PSUs for which performance targets have not yet been established, and which are not yet considered granted for accounting purposes.

(1) Includes financial-based PSUs for which performance targets have not yet been established, and which are not yet considered granted for accounting purposes.

The balance of outstanding awards is comprised of the following:

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RSUs 3,952 53.77

PSUs granted for accounting purposes 409 37.13

PSUs not yet granted for accounting purposes 905 N/A

Financial-based PSUs granted for accounting purposes 505 63.18

Financial-based PSUs not yet granted for accounting purposes 899 N/A

Outstanding at December 31, 2018 5,356

RSUs 4,247 65.12

PSUs granted for accounting purposes 505 63.18

PSUs not yet granted for accounting purposes 899 N/A

Financial-based PSUs granted for accounting purposes 401 73.28

Financial-based PSUs not yet granted for accounting purposes 592 N/A

Outstanding at December 31, 2019 5,240

RSUs 5,356 70.54

PSUs granted for accounting purposes 401 73.28

PSUs not yet granted for accounting purposes 592 N/A

TSR-based RSUs 349 106.14

Financial-based PSUs granted for accounting purposes 223 66.97

Financial-based PSUs not yet granted for accounting purposes 205 N/A

Outstanding at December 31, 2020 6,133

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Such amounts exclude PSUs not yet considered granted for accounting purposes.

We currently believe the performance targets related to the vesting of PSUs considered granted for accounting purposes will be achieved.

If such targets are not achieved, or are subsequently determined to not be probable of being achieved, we will not recognize any compensation expense for PSUs not expected to vest, and will reverse any previously recognized expense on such awards.

2019 Error Correction

During 2019, we reversed $ 15.6 million of equity-based compensation expense as we determined that we had previously recognized such expense related to certain PSUs prior to the establishment of a grant date for accounting purposes.

We determined the amounts related to the prior periods were immaterial considering both quantitative and qualitative factors.

Deferred Revenue

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Accrued expenses and other current liabilities consisted of the following:

Accrued payroll and employee benefits $ 116.9 $ 105.9

Derivative liabilities $ 216.4 $ 93.8

Accrued payroll and employee benefits 114.8 117.0

Current portion of operating lease liabilities 41.5 39.5

Tax-related accruals 38.4 30.7

Accrued marketing and advertising 29.9 14.7

Accrued legal and professional 24.4 28.7

Accrued marketing and advertising expenses 14.7 19.4

Accrued acquisition-related expenses and acquisition consideration payable 9.4 8.3

Accrued other 33.3 44.8

Other 52.6 33.3

$ 527.4 $ 366.0

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Long-term debt consisted of the following:

Maturity Date 2020 2019

2024 Term Loans (effective interest rate of 2.8 % at December 31, 2020 and 4.7 % at December 31, 2019)

$ 1,832.3 $ 2,457.3

Senior Notes (effective interest rate of 5.4 % at December 31, 2019)

February 15, 2024 $ 1,807.4 $ 1,832.3

2027 Term Loans (effective interest rate of 3.0 % at December 31, 2020)

August 10, 2027 746.2 —

Senior Notes (effective interest rate of 5.4 % at December 31, 2020 and December 31, 2019)

December 1, 2027 600.0 600.0

February 15, 2024 — —

Total 3,153.6 2,432.3

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(1) Original issue discount and debt issuance costs amortized to interest expense over the life of the related debt instruments using the effective interest method.

(1) Original issue discount and debt issuance costs amortized to interest expense over the life of the related debt instruments using the interest method.

Credit Facility

Our secured credit agreement (the Credit Facility), which matures on February 15, 2024, consists of both term loans (the Term Loans) and a revolving credit facility (the Revolver).

The Credit Facility originally included a $ 1,100.0 million term loan and an available $ 150.0 million Revolver.

In February 2017, we refinanced the Credit Facility to provide for:

(i) a $ 1,072.5 million seven -year term loan, (ii) a second $ 1,425.0 million term loan, which was issued on April 3, 2017 upon the completion of our acquisition of HEG, and (iii) a $ 150.0 million five -year Revolver, which increased to $ 200.0 million upon the completion of our acquisition of HEG.

In November 2017, we further refinanced the Credit Facility to reduce the interest rate margins applicable to the Term Loans.

In connection with the 2017 refinancings, we recognized an aggregate $ 2.0 million loss on debt extinguishment, recorded $ 3.7 million as additional discount and recorded $ 3.3 million in aggregate fees as general and administrative expense.

Our secured credit agreement (the Credit Facility) includes our previously-issued term loans (the 2024 Term Loans), a new tranche of term loans issued in August 2020 (the 2027 Term Loans) and a revolving credit facility (the Revolver).

As further described below, in June 2019 we issued 5.25 % unsecured senior notes (the Senior Notes) in an aggregate principal amount of $ 600.0 million, the proceeds of which were used to prepay $ 600.0 million of the outstanding principal balance of the 2024 Term Loans.

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Fees incurred in connection with the refinancing were not material.

In August 2020, we amended the Credit Facility to allow for the issuance of the 2027 Term Loans in an aggregate principal amount of $ 750.0 million.

The 2027 Term Loans were issued at a 0.5 % discount on the face of the note at original issue for net proceeds of $ 746.3 million, which were used to partially fund the payments associated with the settlement of our obligations under certain tax receivable agreements (TRAs), as discussed in Note 16.

In conjunction with the issuance of these loans, we recognized an additional $ 6.5 million in debt issuance costs.

The 2024 Term Loans bear interest at a rate equal to, at our option, either (a) LIBOR plus 1.75 % per annum or (b) 0.75 % per annum plus the highest of (i) the Federal Funds Rate plus 0.5 %, (ii) the Prime Rate or (iii) one-month LIBOR plus 1.0 %.

A portion of the Term Loans are hedged by an interest rate swap.

See Note 11 for discussion of this hedging instrument and its impact on the interest rate associated with the Term Loans.

A portion of these loans are hedged by an interest rate swap, as discussed in Note 10.

The 2027 Term Loans bear interest at a rate equal to, at our option, either (a) LIBOR plus 2.50 % per annum or (b) 1.5 % per annum plus the highest of (i) the Federal Funds Rate plus 0.5 %, (ii) the Prime Rate or (iii) one-month LIBOR plus 1.0 %.

These loans are hedged by an interest rate swap, as discussed in Note 10.

The Revolver bears interest at a rate equal to, at our option, either (a) LIBOR plus a margin ranging from 1.25 % to 1.75 % per annum or (b) the higher of (i) the Federal Funds Rate plus 0.5 %, (ii) the Prime Rate or (iii) the one-month LIBOR rate plus 1.0 % plus a margin ranging from 0.25 % to 0.75 % per annum, with the margins determined based on our first lien secured leverage ratio.

The Revolver also contains a financial covenant requiring us to maintain a leverage ratio of 5.75 :1.00

when our usage exceeds 20.0 % of the maximum capacity.

The Revolver also contains a financial covenant requiring us to maintain a leverage ratio of 5.75 :1.00 when our usage exceeds 20.0 % of the maximum capacity.

This ratio is calculated as the ratio of first lien secured debt less cash and cash equivalents to consolidated EBITDA (as defined in the Credit Facility).

All LIBOR-based interest rates under the Credit Facility are subject to a 0.0 % floor on LIBOR.

Principal payments comprising 0.25 % of the initial principal balances of the term loans are due quarterly.

In addition to paying interest on the outstanding principal under the term loans, we are required to pay a commitment fee ranging from 0.125 % to 0.375 % per annum for any unutilized commitments under the Revolver, with the applicable fee determined based on our first lien secured leverage ratio.

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At December 31, 2020, we were not in violation of any covenants of the Senior Notes.

The estimated fair values of the Term Loans and Senior Notes were $ 1,842.6 million and $ 632.0 million, respectively, at December 31, 2019 based on observable market prices for these loans, which are traded in less active markets and therefore classified as Level 2 fair value measurements.

Bridge Financing

On April 3, 2017, we entered into a bridge credit agreement pursuant to which we borrowed an aggregate principal amount of € 500 million (approximately $ 533.0 million on the date of issuance) in connection with the HEG acquisition.

Following the sale of PlusServer on August 31, 2017, as further discussed in Note 4, we prepaid this loan in its entirety and the underlying credit agreement was canceled.

We recognized a $ 5.3 million loss on debt extinguishment, representing the remaining unamortized original issue discount and debt issuance costs on this loan.

As this loan was contractually required to be repaid with any proceeds received from the sale of PlusServer, interest expense attributable to the loan of $ 12.4 million in 2017 was recorded within discontinued operations.

The estimated fair values of the 2024 Term Loans, 2027 Term Loans and the Senior Notes were $ 1,804.0 million, $ 750.4 million and $ 633.8 million, respectively, at December 31, 2020 based on observable market prices for these loans, which are traded in less active markets and therefore classified as Level 2 fair value measurements.

Future Debt Maturities

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We do not enter into derivative transactions for speculative or trading purposes.

The following table summarizes our outstanding derivative instruments, all of which are designated as cash flow hedges, on a gross basis:

We utilize a variety of derivative instruments, all of which are designated as cash flow hedges, including:

• foreign exchange forward contracts to hedge certain forecasted sales transactions denominated in foreign currency;

• a cross-currency swap arrangement used to manage variability due to movements in foreign currency exchange rates related to a Euro-denominated intercompany loan;

• pay-fixed rate, receive-floating rate interest rate swap arrangements to effectively convert portions of our variable-rate debt to fixed.

The following table summarizes our outstanding derivative instruments on a gross basis:

Notional Amount Fair Value of Derivative Assets (2)

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1,461.9 1,355.8 — — 167.2 64.1

Interest rate swap 1,289.0 1,302.3 — — 26.4 1.4

Interest rate swaps 2,022.0 1,289.0 2.0 — 33.4 26.4

Total hedges $ 3,760.1 $ 2,783.7 $ 2.0 $ — $ 216.4 $ 93.8

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The following table summarizes the effect of our designated cash flow hedging derivative instruments on AOCI:

Unrealized Gains (Losses) Recognized in Other Comprehensive Income

Unrealized Gains (Losses) Recognized in Other Comprehensive Income (Loss)

Year Ended December 31,

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Cross-currency swap 16.2 25.8 ( 3.5 )

Interest rate swap ( 25.0 ) 17.7 ( 19.1 )

Interest rate swaps ( 4.9 ) ( 25.0 ) 17.7

Total hedges $ ( 6.3 ) $ ( 1.9 ) $ 23.1

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— 28.9 ( 120.4 ) — 30.1 28.1 — 28.3 65.9

Interest Rate Swap:

Interest rate swaps:

Reclassified from AOCI into income — ( 25.6 ) — — ( 2.6 ) — — ( 6.5 ) —

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(1) The amount reflected in other income (expense), net includes $( 28.7 ) million, $( 67.3 ) million and $ 162.8 million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by the cross-currency swap during 2019, 2018 and 2017, respectively.

As of December 31, 2019, we estimate that approximately $ 22.0 million of net deferred gains related to our cash flow hedges will be recognized in earnings over the next 12 months.

(1) The amounts reflected in other income (expense), net include $ 119.3 million, $( 28.7 ) million and $( 67.3 ) million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by the cross-currency swap during 2020, 2019 and 2018, respectively.

As of December 31, 2020, we estimate that approximately $ 9.8 million of net deferred losses related to our cash flow hedges will be recognized in earnings over the next 12 months.

No amounts were excluded from our effectiveness testing during any of the periods presented.

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Cross-Currency Swap Contract

In April 2017, in order to manage variability due to movements in foreign currency rates related to a Euro-denominated intercompany loan, we entered into a five -year cross-currency swap arrangement (the Cross-Currency Swap).

In April 2017, in order to manage variability due to movements in foreign currency rates related to a Euro-denominated intercompany loan, we entered into a five-year cross-currency swap arrangement.

The cross-currency swap, which matures on April 3, 2022, had an amortizing notional amount of € 1,243.3 million at inception (approximately $ 1,325.4 million).

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In addition, an amount is reclassified from AOCI to other income (expense), net each reporting period, to offset the earnings impact of the hedged instrument.

Interest Rate Swap Contract

In April 2017, we entered into a five -year pay-fixed rate, receive-floating rate interest rate swap arrangement (the Interest Rate Swap) to effectively convert a portion of the variable-rate debt to fixed.

The Interest Rate Swap, which matures on April 3, 2022, had an amortizing notional amount of $ 1,325.4 million at inception and swaps the variable interest rate on our LIBOR-based borrowings for a fixed rate of 5.44 %.

The objective of the Interest Rate Swap, which is designated as a cash flow hedge and recognized as an asset or liability at fair value, is to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged.

The unrealized gains and losses on the contract are included in gain (loss) on swaps and foreign currency hedging, net within AOCI, and will be recognized in earnings within or against interest expense when the hedged interest payment is accrued each month.

Interest Rate Swap Contracts

In April 2017, we entered into a five-year pay-fixed rate, receive-floating rate interest rate swap arrangement to effectively convert a portion of the variable-rate debt to fixed.

This arrangement, which matures on April 3, 2022, had an amortizing notional amount of $ 1,325.4 million at inception and swaps the variable interest rate on our LIBOR-based borrowings for a fixed rate of 5.44 %.

In August 2020, in conjunction with the issuance of the 2027 Term Loans discussed in Note 9, we entered into seven-year pay-fixed rate, receive-floating rate interest rate swap arrangements to effectively convert the variable one-month LIBOR interest rate on the 2027 Term Loans borrowings to a fixed rate of 0.705 %.

These interest rate swaps, which mature on August 10, 2027, had an aggregate notional amount of $ 750.0 million at inception.

The objective of these arrangements, which are designated as cash flow hedges and recognized as assets or liabilities at fair value, is to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged.

The unrealized gains and losses on the contracts are included in gain (loss) on swaps and foreign currency hedging, net within AOCI, and will be recognized in earnings within or against interest expense when the hedged interest payments are accrued each month.

Our operating leases primarily consist of office and data center space expiring at various dates through November 2036.

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Net lease costs $ 59.4 $ 61.4

Total rent expense related to operating leases was $ 44.1 million and $ 38.3 million during 2018 and 2017, respectively.

Supplemental cash flow information related to operating leases was as follows:

Year Ended December 31, 2019

Cash paid for amounts included in the measurement of operating lease liabilities $ 50.0

ROU assets obtained in exchange for operating lease obligations 126.3

Operating lease liabilities are included in our balance sheets as follows:

December 31, 2019

Accrued expenses and other current liabilities $ 39.5

Operating lease liabilities, net of current portion 192.9

Total rent expense related to operating leases was $ 38.3 million during 2018.

We recognized an impairment of our operating lease assets during 2020, as discussed in Note 13.

Maturities of operating lease liabilities as of December 31, 2020 were as follows:

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Thereafter 0.1

Total minimum payments $ 180.8

From time-to-time, we are a party to litigation and subject to claims incident to the ordinary course of business, including intellectual property claims, putative and certified class actions, commercial and consumer protection claims, labor and employment claims, breach of contract claims and other asserted and unasserted claims.

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GoDaddy.com (Case No.

2:16-cv-03908-DLR)(U.S.D.C.)(D.AZ), filed on June 20, 2016.

2:16-cv-03908-DLR) (D.

Ariz.), filed on June 20, 2016.

The complaint alleges violation of the Telephone Consumer Protection Act of 1991 (the TCPA).

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John Herrick v.

GoDaddy.com, LLC, D.

2:16-cv-00254, appeal pending 18-16048 (9th Cir.)) and Susan Drazen v.

GoDaddy.com, LLC (Case No 19-cv-00563).

The amended settlement agreement is still subject to Court approval;

a Motion for Preliminary Approval was filed on January 10, 2020 and remains pending.

Under the terms of the proposed amended settlement agreement, we would make available a total of up to $ 35.0 million to pay:

(i) class members, at their election, either a cash settlement or a credit to be used for future purchases of products from us, (ii) an incentive payment to the class representative, (iii) notice and administration costs in connection with the settlement, and (iv) attorneys' fees to legal counsel representing the class.

If approved, we would receive a full release from the settlement class (other than from those class members who timely elect to opt out of the settlement) concerning the claims asserted, or that could have been asserted, with respect to the claims released in the amended settlement agreement.

During the three months ended June 30, 2019, we recorded an estimated loss provision of $ 18.1 million to general and administrative expense, which represents our best estimate of the total settlement costs, inclusive of attorneys' fees to be paid to legal counsel representing the class in connection with the settlement.

We made no changes to our estimated loss accrual during the six months ended December 31, 2019.

Our legal fees associated with this matter have been recorded to general and administrative expense as incurred and were not material.

GoDaddy.com, LLC (Case No.

2:16-cv-00254 (D.

Ariz.), appeal pending 18-16048 (9th Cir.)) and Susan Drazen v.

GoDaddy.com, LLC (Case No 19-cv-00563) (S.D.

In 2019, we recorded an $ 18.1 million charge to general and administrative expense, representing our original estimated loss provision for this settlement.

Under the terms of the final settlement agreement, we made available a total of up to $ 35.0 million to pay:

(i) class members, at their election, either a cash settlement or a credit to be used for future purchases of products from us;

(ii) an incentive payment to the class representatives;

(iii) notice and administration costs in connection with the settlement;

and (iv) attorneys' fees to legal counsel representing the class.

On April 22, 2020, the parties filed statements in response to a request from the S.D.

Court (the Court) to refine the class definition, resulting in a reduction in the total number of class members from the original estimated class.

Accordingly, we recorded a $ 2.9 million reduction of our estimated loss provision to general and administrative expense during the three months ended March 31, 2020.

On May 14, 2020, the Court granted approval of the plaintiffs' unopposed motion for preliminary certification of the settlement class, subject to the parties' execution of an amended settlement agreement to remove John Herrick as a class representative.

The parties executed such amendment on May 26, 2020, and on June 9, 2020, the Court granted preliminary approval of the final settlement agreement.

The Court's order also set October 7, 2020 as the deadline for class members to submit claims and December 14, 2020 as the hearing date regarding final approval of the settlement.

On September 1, 2020, the Court issued an amended order reducing the attorneys' fees to be paid to legal counsel representing the class.

Additionally, the actual number of claims made by class members through the October 7, 2020 deadline was lower than our original estimates.

Based primarily on these two factors, we recorded a $ 4.8 million reduction of our estimated loss provision to general and administrative expense during the three months ended September 30, 2020.

On December 23, 2020, the Court issued a final judgment and order approving the class settlement, which further reduced the attorneys' fees to be paid to legal counsel representing the class and denied plaintiffs' request for an incentive payment.

Additionally, the actual notice and administration costs associated with the settlement were lower than originally estimated.

On January 19, 2021, a single objector to the settlement filed a notice of appeal to the 11th Circuit Court of Appeals.

As a result of these developments, we recorded a $ 2.3 million reduction to general and administrative expense during the three months ended December 31, 2020, lowering our estimated loss provision for this settlement to $ 8.1 million at December 31, 2020.

The timing of the payments to be made under the final settlement agreement is pending resolution of the appeal.

We have denied and continue to deny the allegations in the complaint.

Nothing in the amended settlement agreement shall be deemed to assign or reflect any admission of fault, wrongdoing or liability, or of the appropriateness of a class action in such litigation.

Nothing in the final settlement agreement shall be deemed to assign or reflect any admission of fault, wrongdoing or liability, or of the appropriateness of a class action in such litigation.

We received a full release from the settlement class (other than from those class members who timely elected to opt out of the settlement) concerning the claims asserted, or that could have been asserted, with respect to the claims released in the final settlement agreement.

Our legal fees associated with this matter have been recorded to general and administrative expense as incurred and were not material.

The amounts currently accrued for other matters are not material.

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Although we believe our indirect tax estimates and associated liabilities are reasonable, the final determination of indirect tax audits, litigation or settlements could be materially different than the amounts established for indirect tax contingencies.

Restructuring Charges

In June 2020, we announced a restructuring plan related to our outbound sales and operations and recorded $ 43.6 million of pre-tax restructuring charges during 2020.

The aggregate charges included:

(i) $ 14.6 million in severance and related benefits to be paid to, or on behalf of, the impacted employees, as well as professional fees incurred in connection with the restructuring;

(ii) a $ 27.9 million impairment of operating lease assets associated with the closure of our leased offices in Austin, Texas;

and (iii) $ 1.1 million of accelerated depreciation and operating lease assets amortization related to the office closures.

We do not expect to record any additional charges related to the restructuring plan.

Cash payments of $ 14.4 million related to the restructuring were made during 2020, and no material amounts remain as of December 31, 2020.

Defined Contribution Plan

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Desert Newco is treated as a partnership for U.S.

income tax purposes, and for most applicable state and local income tax purposes, and generally does not pay income taxes on its taxable income in most jurisdictions.

income tax purposes, and for most applicable state and local income tax purposes, and generally does not pay income taxes in most jurisdictions.

Instead, Desert Newco's taxable income or loss is passed through to its members, including us.

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federal, state and foreign income taxes.

The domestic and foreign components of our income from continuing operations before income taxes were as follows:

The domestic and foreign components of our income (loss) before income taxes were as follows:

Year Ended December 31,

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Foreign ( 72.0 ) ( 50.0 ) ( 65.9 )

Income from continuing operations before income taxes $ 126.4 $ 73.0 $ 106.8

Income (loss) before income taxes $ ( 495.4 ) $ 126.4 $ 73.0

Our benefit for income taxes was as follows:

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federal statutory tax rate $ 104.0 $ ( 26.5 ) $ ( 15.3 )

Effect of U.S.

federal rate reduction, net of the effect on valuation allowances — — 7.9

Research and development credits 75.0 — —

State taxes, net of federal benefit 44.9 ( 1.2 ) 2.1

Effect of investment in Desert Newco 10.4 7.1 13.1

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Foreign earnings ( 5.4 ) 2.1 3.1

State taxes, net of federal benefit ( 1.2 ) 2.1 ( 3.1 )

Uncertain tax positions ( 5.6 ) — —

Other 0.9 ( 4.3 ) 0.9

Effect of changes in valuation allowances, excluding effect of U.S.

federal rate reduction 33.1 4.8 14.6

Effect of changes in valuation allowances ( 217.6 ) 33.1 4.8

Benefit for income taxes $ 1.3 $ 12.0 $ 9.0

Our effective tax rate is driven by changes in valuation allowances based on current year earnings and the impact of foreign earnings primarily related to the U.K., Germany and India jurisdictions.

In 2017, the increase in the impact of foreign earnings primarily resulted from our acquisition of HEG and the TRA liability adjustment primarily represents the non-deductible portion of the benefit resulting from the decrease in the liability under the TRAs due to the U.S.

federal rate reduction.

Deferred Taxes

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Investment in Desert Newco $ 1,099.5 $ 968.0

$ 968.0 $ 942.5

NOLs 558.1 476.1

Credit and incentives 77.1 3.0

Deferred interest 26.4 34.1

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TRA liability — 24.4

Other 4.7 5.9

Valuation allowance ( 1,761.0 ) ( 1,497.0 )

( 1,497.0 ) ( 1,372.8 )

Total DTAs 27.5 40.2

Identified intangible assets ( 101.8 ) ( 112.8 )

( 112.8 ) ( 133.8 )

Operating lease assets ( 12.5 ) ( 22.7 )

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Net DTLs $ ( 86.8 ) $ ( 95.3 )

As a result of certain pre-IPO organizational transactions, we acquired LLC Units and recognized a DTA for the difference between the financial reporting and tax basis of our investment in Desert Newco.

During 2018, the DTAs associated with our investment increased $ 648.3 million due to exchanges of LLC Units and stock option exercises, and we recorded additional DTAs of $ 125.3 million as a result of our portion of Desert Newco's losses.

During 2019, the DTAs associated with our investment increased $ 113.7 million due to exchanges of LLC Units and stock option exercises, and we recorded additional DTAs of $ 94.4 million as a result of our portion of Desert Newco's losses.

Based primarily on our limited operating history and our historical losses, we believe there is significant uncertainty as to when we will be able to utilize certain of our NOLs, credit carryforwards and other DTAs.

As a result of the organizational transactions completed prior to our initial public offering (IPO), we acquired LLC Units and recognized a DTA for the difference between the financial reporting and tax basis of our investment in Desert Newco.

During 2020, the DTAs associated with our investment increased $ 130.5 million due to exchanges of LLC Units and stock option exercises, and we recorded additional DTAs of $ 70.0 million as a result of our portion of Desert Newco's tax losses.

On March 27, 2020, the U.S.

federal government enacted the Coronavirus Aid, Relief and Economic Security Act (the CARES Act) and on December 21, 2020 enacted the Consolidated Appropriations Act, 2021, neither of which had a material impact on our benefit for income taxes.

During 2020, we completed a research and development (R&D) tax credit study for the 2017, 2018 and 2019 tax years, which resulted in a total tax credit of $ 79.6 million.

However, we do not have sufficient tax liability to utilize the majority of these tax credits;

therefore, we have established tax credit carryforwards of $ 77.8 million.

We generated additional R&D tax credits in 2020 and expect to do so on a go forward basis.

In determining the need for a valuation allowance, we prepare quarterly estimates using historical and forecasted future operating results, based upon approved business plans, including a review of the eligible carryforward periods and tax planning strategies.

Based primarily on the negative evidence outweighing the positive evidence as of December 31, 2020, including our three year cumulative GAAP loss, our historical tax losses and the difficulty in forecasting excess tax benefits related to equity-based compensation, we believe there is uncertainty as to when we will be able to utilize certain of our NOLs, credit carryforwards and other DTAs.

Therefore, we have recorded a valuation allowance against the DTAs for which we have concluded it is more-likely-than-not they will not be realized.

As of December 31, 2019, we have U.S.

Should our operating results continue to improve and projections show utilization of the tax attributes, we would consider that as significant positive evidence and our future reassessment would likely result in the determination that a valuation allowance is no longer required.

We believe sufficient positive evidence may arise in 2021 such that we would release substantially all of the federal and state valuation allowance.

If this were to occur, it would result in a reversal of substantially all of the valuation allowance with a corresponding non-cash income tax benefit, thereby increasing the total DTAs.

As of December 31, 2020, we had U.S.

federal, state and foreign gross NOLs, credits and incentives, a portion of which will begin to expire in 2030, as follows:

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We have determined the amount of unrecognized DTL related to these temporary differences to be immaterial.

We have filed all income tax returns for years through 2018, other than for Germany.

These returns are subject to examination by the taxing authorities in the respective jurisdictions, generally for three or four years after they were filed.

Based on our analysis of tax positions taken on income tax returns filed, we have determined no material liabilities related to uncertain income tax positions were required for 2018.

Our liability for unrecognized tax benefits as of December 31, 2019 was as follows:

Year Ended December 31, 2019

Uncertain Tax Positions

Our liability for unrecognized tax benefits was as follows:

Balance at beginning of period $ 9.3 $ 2.1

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Gross increases - tax positions in current period 13.0 2.7

Current year acquisitions 20.2 —

Balance at end of period $ 66.7 $ 9.3

The total amount of gross unrecognized tax benefits was $ 66.7 million as of December 31, 2020, of which $ 35.3 million, if fully recognized, would decrease our effective tax rate.

We recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense.

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We do not expect a significant decrease in our liability for unrecognized tax benefits in the next 12 months.

We have filed all income tax returns for years through 2019, other than for Germany and the Netherlands.

These returns are subject to examination by the taxing authorities in the respective jurisdictions, generally for three or four years after they were filed.

Although we believe the amounts reflected in our tax returns substantially comply with applicable U.S.

federal, state and foreign tax regulations, the respective taxing authorities may take contrary positions based on their interpretation of the law.

A tax position successfully changed by a taxing authority could result in an adjustment to our benefit for income taxes in the period in which a final determination is made.

Payable to Related Parties Pursuant to the TRAs

As a result of certain pre-IPO organizational transactions, we received certain tax attributes, including the OBAs and NOL carryforwards, from certain of our pre-IPO owners.

These OBAs entitle us to the depreciation and amortization previously allocable to such parties, which are allowed prior to the utilization of any NOL or tax credit carryforwards against income taxes.

If these additional depreciation and amortization deductions are greater than our taxable income, the excess deductions allocated to us will increase the amount of our NOL carryforwards.

Based on current projections of taxable income, and before deduction of any specially allocated depreciation and amortization, we anticipated having enough taxable income to utilize a portion of these specially allocated deductions related to the OBAs.

As of December 31, 2017, the liability under the TRAs was $ 153.0 million, representing approximately 85 % of the calculated tax savings based on the portion of the OBAs we anticipate being able to utilize in future years.

During 2018, we increased this liability through a $ 36.2 million reduction of additional paid-in-capital resulting from exchanges of LLC Units in the secondary offerings discussed in Note 6, partially offset by a $ 14.9 million benefit to our statements of operations primarily resulting from changes in forecasted taxable income.

As of December 31, 2018, the liability under the TRAs was $ 174.3 million.

During 2019, we increased this liability through an aggregate $ 9.7 million reduction of additional paid-in-capital resulting from the exchanges of LLC Units in the secondary offering discussed in Note 6, partially offset by a benefit to our statements of operations of $ 8.7 million primarily resulting from additional tax deductible equity-based compensation.

As of December 31, 2019, the liability under the TRAs was $ 175.3 million.

The projection of future taxable income involves significant judgment.

Actual taxable income may differ from our estimates, which could significantly impact the liability under the TRAs.

We have determined it is more-likely-than-not we will be unable to utilize all of our DTAs subject to TRAs;

therefore, we have not recorded a liability under the TRAs related to the tax savings we may realize from the utilization of NOL carryforwards and the amortization related to basis adjustments created by exchanges of LLC Units.

If utilization of these DTAs becomes more-likely-than-not in the future, at such time, we will record liabilities under the TRAs of up to an additional $ 1,140.9 million as a result of basis adjustments under the Internal Revenue Code and up to an additional $ 438.4 million related to the utilization of NOL and credit carryforwards, which will be recorded through charges to our statements of operations.

However, if the tax attributes are not utilized in future years, it is reasonably possible no amounts would be paid under the TRAs.

In this scenario, the reduction of the liability under the TRAs would result in a benefit to our statements of operations.

Income Per Share

Basic income per share is computed by dividing net income attributable to GoDaddy Inc.

A tax position successfully challenged by a taxing authority could result in an adjustment to our benefit for income taxes in the period in which a final determination is made.

Payable Pursuant to the TRAs

Concurrent with the completion of our IPO, we became a party to five TRAs with our pre-IPO owners.

Under the TRAs, we were generally required to pay to such owners approximately 85 % of the amount of calculated tax savings, if any, we were deemed to realize based on the relevant tax benefits allocated to us as a result of our acquisition of their LLC Units in the pre-IPO organizational transactions or from subsequent exchanges of their LLC Units (together with the corresponding shares of Class B common stock) for shares of our Class A common stock.

On July 31, 2020, we entered into settlement and release agreements with respect to four of the TRAs, and an amendment to the fifth TRA (collectively, the TRA Settlement Agreements), pursuant to which we settled all liabilities under the TRAs in exchange for aggregate payments totaling $ 850.0 million, of which $ 849.8 million was paid during 2020.

Upon payment, we were released from all obligations to the parties to the TRAs, including the holders of unexchanged LLC Units.

We recorded a charge of $ 674.7 million to our statements of operations during 2020 to adjust the liability under the TRAs from $ 175.3 million to the aggregate settlement amount.

As a result of the TRA Settlement Agreements, we retained all of the future cash tax savings from the utilization of the tax attributes we acquired as a result of acquisitions or exchanges of LLC Units subject to the TRAs.

These attributes entitle us to the depreciation and amortization deductions previously allocable to the original owner of such units.

Unutilized deductions related to these items are converted to NOL carryforwards.

Upon execution of the TRA Settlement Agreements, we generated approximately $ 180.0 million in additional DTAs.

However, given that the negative evidence, including cumulative tax losses in recent years, continues to outweigh the positive evidence, we recorded a full valuation allowance against these DTAs.

See Note 15 for additional discussion of the valuation allowances associated with our DTAs.

Income (Loss) Per Share

Basic income (loss) per share is computed by dividing net income (loss) attributable to GoDaddy Inc.

by the weighted-average number of shares of Class A common stock outstanding during the period.

Diluted income per share is computed giving effect to all potentially dilutive shares unless their effect is antidilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per share is as follows:

Diluted income (loss) per share is computed giving effect to all potentially dilutive shares unless their effect is antidilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share is as follows:

Year Ended December 31,

2020 2019 2018

Income from continuing operations $ 138.4 $ 82.0 $ 125.7

Income from discontinued operations, net of income taxes — — 14.1

Net income 138.4 82.0 139.8

Net income (loss) ( 494.1 ) 138.4 82.0

net income attributable to non-controlling interests 1.0 1.4 4.9

Net income attributable to GoDaddy Inc.

Net income (loss) attributable to GoDaddy Inc.

$ ( 495.1 ) $ 137.0 $ 77.1

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Weighted-average shares of Class A Common stock outstanding—diluted 168,636 181,721 181,353

Net income attributable to GoDaddy Inc.

Net income (loss) attributable to GoDaddy Inc.

per share of Class A common stock—basic $ ( 2.94 ) $ 0.79 $ 0.50

Continuing operations $ 0.79 $ 0.50 $ 1.17

Discontinued operations — — 0.08

Net income attributable to GoDaddy Inc.

$ 0.79 $ 0.50 $ 1.25

Net income attributable to GoDaddy Inc.

Net income (loss) attributable to GoDaddy Inc.

per share of Class A common stock—diluted (1)

Continuing operations $ 0.76 $ 0.45 $ 0.71

Discontinued operations — — 0.08

Net income attributable to GoDaddy Inc.

$ ( 2.94 ) $ 0.76 $ 0.45

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(1) The diluted income per share calculations exclude net income attributable to non-controlling interests.

The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted income per share because the effect of including such potentially dilutive shares would have been antidilutive:

(1) The diluted income (loss) per share calculations exclude net income attributable to non-controlling interests, unless the effect is antidilutive.

The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted income (loss) per share because the effect of including such shares would have been antidilutive:

Year Ended December 31,

2020 2019 2018

Stock options, RSUs and PSUs 1,784 982 1,700

Class B common stock 1,145 — —

Stock options 3,259 1,705 742

RSUs, PSUs and ESPP shares 2,045 79 240

6,449 1,784 982

Shares of Class B common stock do not share in our earnings and are not participating securities.

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Year Ended December 31,

International 58.2 68.0

France 27.0 24.4

All other international 32.0 33.8

$ 257.3 $ 258.6

No individual international country represented more than 10% of property and equipment, net in any period presented.

Related Party Transactions

As of December 31, 2019 and 2018, affiliates of KKR held $ 7.8 million and $ 10.4 million, respectively, of the outstanding principal balance of our Term Loans as participating lenders.

No material amounts were paid to KKR during any of the periods presented.

No other individual international country represented more than 10% of property and equipment, net in any period presented.

Accumulated Other Comprehensive Loss

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Foreign Currency Translation Adjustments Net Unrealized Gains (Losses) on Cash Flow Hedges (1)

Total Accumulated Other Comprehensive Income (Loss)

Gross balance as of December 31, 2018 (2)

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(2) Beginning balance is presented on a gross basis, excluding the allocation of AOCI attributable to non-controlling interests.

The sale of discontinued operations in August 2017 resulted in the reclassification from AOCI of $ 46.9 million in cumulative foreign currency translation adjustments, which was reported in the gain on disposal within discontinued operations in 2017.

The income tax impact associated with this reclassified amount was not material.

See Note 10 for the effect on net income of amounts reclassified from AOCI related to our cash flow hedging instruments.

The income tax impact associated with these reclassified amounts was not material in any period presented.

Selected Quarterly Financial Data (Unaudited)

The following table contains selected unaudited statements of operations information for each quarter of 2019 and 2018.

The following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented.

The operating results for any quarter are not necessarily indicative of results for any future period.

Three Months Ended

31, 2019 Sept.

30, 2019 Jun.

30, 2019 Mar.

31, 2019 Dec.

31, 2018 Sept.

30, 2018 Jun.

30, 2018 Mar.

Total revenue $ 780.4 $ 760.5 $ 737.2 $ 710.0 $ 695.8 $ 679.5 $ 651.6 $ 633.2

Operating income 73.5 91.4 18.9 18.8 41.8 37.5 43.5 26.8

Net income (loss) 61.1 76.8 ( 12.7 ) 13.2 43.5 14.1 20.2 4.2

Net income (loss) attributable to GoDaddy Inc.

60.5 76.2 ( 12.6 ) 12.9 42.5 13.2 18.1 3.3

Net income (loss) attributable to GoDaddy Inc.

per share of Class A common stock—basic $ 0.35 $ 0.44 $ ( 0.07 ) $ 0.08 $ 0.25 $ 0.08 $ 0.12 $ 0.02

Net income (loss) attributable to GoDaddy Inc.

per share of Class A common stock—diluted $ 0.34 $ 0.42 $ ( 0.07 ) $ 0.07 $ 0.24 $ 0.08 $ 0.11 $ 0.02

Subsequent Events

In February 2020, we entered into agreements for two acquisitions with an aggregate purchase price of approximately $ 196.9 million, of which $ 149.1 million has been paid in cash.

The remaining $ 47.8 million will be paid upon receipt of certain regulatory approvals and satisfaction of other customary closing conditions as well as upon the expiration of the contractual holdback period.

In February 2021, we acquired Poynt Co.

for $ 329.2 million in cash paid at closing and an additional $ 45.0 million in deferred cash payments subject to certain performance and employment conditions over the three years subsequent to the closing date.

Poynt offers a suite of products allowing small businesses to sell and accept payments anywhere, including point-of-sale systems, payments, invoicing and transaction management.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data