Supplemental Guarantor Financial Information (Tables)

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Financial Statements

The following tables present supplemental condensed consolidating balance sheet information of Holdings (“Parent”), the Issuer, the Subsidiary Guarantors and the Non-Guarantor Subsidiaries as of December 31, 2019 and March 31, 2020, and supplemental condensed consolidating results of operations for the three months ended March 31, 2019 and 2020:

Condensed Consolidating Balance Sheets

December 31, 2019

(in thousands)

	Parent		Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	195	$	1		$	80,642		$	30,427		$	—		$	111,265
Restricted cash	—		—			1,732			—			—			1,732
Accounts receivable	—		—			8,762			1,462			—			10,224
Prepaid domain name registry fees	—		—			48,943			6,294			—			55,237
Prepaid commissions	—		—			37,910			525			—			38,435
Prepaid expenses and other current assets	—		90			26,847			3,756			—			30,693
Total current assets	195		91			204,836			42,464			—			247,586
Intercompany receivables—net	32,845		172,807			(87,398		)	(118,254		)	—			—
Property and equipment—net	—		—			72,751			13,174			—			85,925
Operating lease right-of-use assets	—		—			86,111			4,408			—			90,519
Goodwill	—		—			1,677,587			157,723			—			1,835,310
Other intangible assets—net	—		—			243,994			1,008			—			245,002
Investment in subsidiaries	163,934		1,693,565			61,023			—			(1,918,522		)	—
Prepaid commissions, net of current portion	—		—			48,289			491			—			48,780
Other assets	—		1,784			27,215			1,965			—			30,964
Total assets	$	196,974	$	1,868,247		$	2,334,408		$	102,979		$	(1,918,522	)	$	2,584,086
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	—	$	—		$	9,474		$	580		$	—		$	10,054
Accrued expenses and other current liabilities	20		23,554			59,695			7,141			—			90,410
Deferred revenue	—		—			345,116			24,359			—			369,475
Operating lease liabilities—short term	—		—			18,513			2,680			—			21,193
Current portion of notes payable	—		31,606			—			—			—			31,606
Current portion of financed equipment	—		—			790			—			—			790
Deferred consideration—short term	—		—			2,201			—			—			2,201
Total current liabilities	20		55,160			435,789			34,760			—			525,729
Deferred revenue—long term	—		—			94,471			5,181			—			99,652
Operating lease liabilities—long term	—		—			76,166			1,985			—			78,151
Notes payable	—		1,649,867			—			—			—			1,649,867
Deferred consideration	—		—			—			—			—			—
Other long-term liabilities	—		(714		)	34,417			30			—			33,733
Total liabilities	20		1,704,313			640,843			41,956			—			2,387,132
Equity	196,954		163,934			1,693,565			61,023			(1,918,522		)	196,954
Total liabilities and stockholders' equity	$	196,974	$	1,868,247		$	2,334,408		$	102,979		$	(1,918,522	)	$	2,584,086

Condensed Consolidating Balance Sheets

March 31, 2020

(unaudited, in thousands)

	Parent		Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1,716	$	1		$	78,183		$	31,908		$	—		$	111,808
Restricted cash	—		—			1,731			—			—			1,731
Accounts receivable	—		—			9,199			1,432			—			10,631
Prepaid domain name registry fees	—		—			50,407			6,177			—			56,584
Prepaid commissions	—		—			37,927			494			—			38,421
Prepaid expenses and other current assets	—		57			32,223			3,809			—			36,089
Total current assets	1,716		58			209,670			43,820			—			255,264
Intercompany receivables—net	19,229		130,452			(27,304		)	(122,377		)	—			—
Property and equipment—net	—		—			79,709			12,475			—			92,184
Operating lease right-of-use assets	—		—			81,533			3,345			—			84,878
Goodwill	—		—			1,677,587			156,742			—			1,834,329
Other intangible assets, net	—		—			226,819			852			(1		)	227,670
Investment in subsidiaries	171,824		1,725,932			59,193			—			(1,956,949		)	—
Prepaid commissions, net of current portion	—		—			51,564			486			—			52,050
Other assets	—		1,615			27,818			2,043			—			31,476
Total assets	$	192,769	$	1,858,057		$	2,386,589		$	97,386		$	(1,956,950	)	$	2,577,851
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	—	$	—		$	14,283		$	396		$	—		$	14,679
Accrued expenses and other current liabilities	724		13,282			62,238			6,396			—			82,640
Deferred revenue	—		—			354,589			22,929			—			377,518
Operating lease liabilities—short term	—		—			18,328			1,981			—			20,309
Current portion of notes payable	—		31,606			—			—			—			31,606
Current portion of financed equipment	—		—			6,081			—			—			6,081
Deferred consideration—short term	—		—			2,225			—			—			2,225
Total current liabilities	724		44,888			457,744			31,702			—			535,058
Deferred revenue—long term	—		—			97,181			4,911			—			102,092
Operating lease liabilities—long term	—		—			71,774			1,566			—			73,340
Notes payable	—		1,641,938			—			—			—			1,641,938
Financed equipment, long-term	—		—			597			—			—			597
Other long-term liabilities	—		(594		)	33,361			14			—			32,781
Total liabilities	724		1,686,232			660,657			38,193			—			2,385,806
Equity	192,045		171,825			1,725,932			59,193			(1,956,950		)	192,045
Total liabilities and stockholders' equity	$	192,769	$	1,858,057		$	2,386,589		$	97,386		$	(1,956,950	)	$	2,577,851

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

Three Months Ended March 31, 2019

(unaudited, in thousands)

	Parent			Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	—		$	268,459	$	15,593		$	(3,369	)	$	280,683
Cost of revenue	—			—			117,032		10,191			(3,369		)	123,854
Gross profit	—			—			151,427		5,402			—			156,829
Operating expense:
Sales and marketing	—			—			63,738		2,850			—			66,588
Engineering and development	—			—			21,602		2,092			—			23,694
General and administrative	—			58			31,051		284			—			31,393
Total operating expense	—			58			116,391		5,226			—			121,675
(Loss) income from operations	—			(58		)	35,036		176			—			35,154
Interest expense and other income—net	—			37,044			14		(135		)	—			36,923
(Loss) income before income taxes and equity earnings of unconsolidated entities	—			(37,102		)	35,022		311			—			(1,769		)
Income tax (benefit) expense	—			(8,830		)	10,149		400			—			1,719
(Loss) income before equity earnings of unconsolidated entities	—			(28,272		)	24,873		(89		)	—			(3,488		)
Equity loss (income) of unconsolidated entities, net of tax	3,488			(24,784		)	89		—			21,207			—
Net (loss) income	$	(3,488	)	$	(3,488	)	$	24,784	$	(89	)	$	(21,207	)	$	(3,488	)
Comprehensive income (loss):
Foreign currency translation adjustments	—			—			—		(401		)	—			(401		)
Unrealized gain (loss) on cash flow hedge, net of taxes	—			(961		)	—		—			—			(961		)
Total comprehensive (loss) income	$	(3,488	)	$	(4,449	)	$	24,784	$	(490	)	$	(21,207	)	$	(4,850	)

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

Three Months Ended March 31, 2020

(unaudited, in thousands)

	Parent			Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	—		$	260,579	$	15,564		$	(3,949	)	$	272,194
Cost of revenue	—			—			108,425		11,788			(3,949		)	116,264
Gross profit	—			—			152,154		3,776			—			155,930
Operating expense:
Sales and marketing	—			—			65,647		1,544			—			67,191
Engineering and development	—			—			23,911		2,963			—			26,874
General and administrative	482			61			31,160		(827		)	—			30,876
Total operating expense	482			61			120,718		3,680			—			124,941
(Loss) income from operations	(482		)	(61		)	31,436		96			—			30,989
Interest expense and other income—net	—			32,546			120		(102		)	—			32,564
(Loss) income before income taxes and equity earnings of unconsolidated entities	(482		)	(32,607		)	31,316		198			—			(1,575		)
Income tax (benefit) expense	—			(7,759		)	7,769		659			—			669
(Loss) income before equity earnings of unconsolidated entities	(482		)	(24,848		)	23,547		(461		)	—			(2,244		)
Equity loss (income) of unconsolidated entities, net of tax	1,762			(23,088		)	462		—			20,864			—
Net (loss) income	$	(2,244	)	$	(1,760	)	$	23,085	$	(461	)	$	(20,864	)	$	(2,244	)
Comprehensive income (loss):
Foreign currency translation adjustments	—			—			—		(557		)	—			(557		)
Unrealized gain (loss) on cash flow hedge, net of taxes	—			372			—		—			—			372
Total comprehensive (loss) income	$	(2,244	)	$	(1,388	)	$	23,085	$	(1,018	)	$	(20,864	)	$	(2,429	)