Supplemental Guarantor Financial Information (Notes)

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Guarantor Financial Information

Supplemental Guarantor Financial Information

In February 2016, EIG Investors Corp., a wholly-owned subsidiary of the Company (the “Issuer”), issued $350.0 million aggregate principal amount of its 10.875% Senior Notes due 2024 (refer to Note 10, Notes Payable, for further details), which it exchanged for new 10.875% Senior Notes due 2024 pursuant to a registration statement on Form S-4. The registered exchange offer for the Senior Notes was completed on January 30, 2017. The Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by the Company and the Issuer, and the following wholly-owned subsidiaries: The Endurance International Group, Inc., Bluehost Inc., FastDomain Inc., Domain Name Holding Company, Inc., Endurance International Group – West, Inc., HostGator.com LLC, A Small Orange, LLC, and Constant Contact, Inc.(collectively, the “Subsidiary Guarantors”), subject to certain customary guarantor release conditions. The Company’s other domestic subsidiaries and its foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) have not guaranteed the Senior Notes.

SinglePlatform, LLC ceased being a Subsidiary Guarantor on December 5, 2019 due to the Company's sale of the SinglePlatform business, including SinglePlatform, LLC. P.D.R Solutions (U.S.) LLC became a Subsidiary Guarantor on April 25, 2019. The condensed consolidated financial statements have been revised for all periods presented to reflect these changes.

The following tables present supplemental condensed consolidating balance sheet information of the Company (“Parent”), the Issuer, the Subsidiary Guarantors and the Non-Guarantor Subsidiaries as of December 31, 2018 and December 31, 2019, and supplemental condensed consolidating results of operations and cash flow information for the years ended December 31, 2017, 2018 and 2019:

Condensed Consolidating Balance Sheets

December 31, 2018

(in thousands)

	Parent		Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets:
Current assets:
Cash and cash equivalents	$	21	$	2		$	62,495		$	26,126		$	—		$	88,644
Restricted cash	—		—			1,932			—			—			1,932
Accounts receivable	—		—			11,219			986			—			12,205
Prepaid domain name registry fees	—		—			50,325			6,454			—			56,779
Prepaid commissions	—		—			40,804			654			—			41,458
Prepaid expenses & other current assets	—		422			31,425			3,243			—			35,090
Total current assets	21		424			198,200			37,463			—			236,108
Intercompany receivables, net	34,595		401,342			(323,200		)	(112,737		)	—			—
Property and equipment, net	—		—			79,091			13,184			—			92,275
Goodwill	—		—			1,695,451			153,614			—			1,849,065
Other intangible assets, net	—		—			351,920			596			—			352,516
Investment in subsidiaries	139,838		1,559,256			57,749			—			(1,756,843		)	—
Prepaid commissions, net of current portion	—		—			41,746			726			—			42,472
Other assets	—		5,239			27,463			1,369			—			34,071
Total assets	$	174,454	$	1,966,261		$	2,128,420		$	94,215		$	(1,756,843	)	$	2,606,507
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	—	$	—		$	12,015		$	434		—			$	12,449
Accrued expenses and other current liabilities	—		25,373			77,316			7,494			—			110,183
Deferred revenue	—		—			347,703			24,055			—			371,758
Current portion of notes payable	—		31,606			—			—			—			31,606
Current portion of financed equipment	—		—			8,379			—			—			8,379
Deferred consideration, short-term	—		—			2,425			—			—			2,425
Total current liabilities	—		56,979			447,838			31,983			—			536,800
Deferred revenue, long-term	—		—			91,615			4,525			—			96,140
Notes payable	—		1,770,055			—			—			—			1,770,055
Financed equipment—long term	—		—			—			—			—			—
Deferred consideration	—		—			1,364			—			—			1,364
Other long-term liabilities	—		(612		)	28,349			(43		)	—			27,694
Total liabilities	—		1,826,422			569,166			36,465			—			2,432,053
Equity	174,454		139,839			1,559,254			57,750			(1,756,843		)	174,454
Total liabilities and equity	$	174,454	$	1,966,261		$	2,128,420		$	94,215		$	(1,756,843	)	$	2,606,507

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 & 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
Financed equipment—long term	—		—			—			—			—			—
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 equity	$	196,974	$	1,868,247		$	2,334,408		$	102,979		$	(1,918,522	)	$	2,584,086

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2017

(in thousands)

	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	—		$	1,080,220		$	107,385		$	(10,738	)	$	1,176,867
Cost of revenue	—			—			540,965			72,425			(9,460		)	603,930
Gross profit	—			—			539,255			34,960			(1,278		)	572,937
Operating expense:
Sales and marketing	—			—			260,516			16,947			(3		)	277,460
Engineering and development	—			—			66,113			12,659			—			78,772
General and administrative	—			207			159,251			5,142			(628		)	163,972
Transaction expenses	—			—			773			—			—			773
Impairment of goodwill	—			—			12,129			—			—			12,129
Total operating expense	—			207			498,782			34,748			(631		)	533,106
(Loss) income from operations	—			(207		)	40,473			212			(647		)	39,831
Total other expense (income)—net	—			156,144			1,336			(474		)	—			157,006
(Loss) income before income taxes and equity earnings of unconsolidated entities	—			(156,351		)	39,137			686			(647		)	(117,175		)
Income tax (benefit) expense	—			(57,504		)	39,233			990			—			(17,281		)
(Loss) income before equity earnings of unconsolidated entities	—			(98,847		)	(96		)	(304		)	(647		)	(99,894		)
Net loss (income) attributable to non-controlling interest	106,661			7,814			194			(17		)	(114,762		)	(110		)
Net (loss) income	$	(106,661	)	$	(106,661	)	$	(290	)	$	(287	)	$	114,115		$	(99,784	)
Net loss attributable to non-controlling interest	—			—			7,524			—			—			7,524
Net (loss) income attributable to Endurance International Group Holdings, Inc.	$	(106,661	)	$	(106,661	)	$	(7,814	)	$	(287	)	$	114,115		$	(107,308	)
Comprehensive (loss) income:
Foreign currency translation adjustments	—			—			—			3,091			—			3,091
Unrealized gain on cash flow hedge				34			—			—			—			34
Total comprehensive (loss) income	$	(106,661	)	$	(106,627	)	$	(7,814	)	$	2,804		$	114,115		$	(104,183	)

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2018

(in thousands)

	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	—		$	1,094,463		$	64,665		$	(13,837	)	$	1,145,291
Cost of revenue	—			—			490,966			43,608			(13,837		)	520,737
Gross profit	—			—			603,497			21,057			—			624,554
Operating expense:
Sales and marketing	—			—			255,272			10,152			—			265,424
Engineering and development	—			—			80,095			7,885			—			87,980
General and administrative	(12		)	225			168,560			(44,569		)	—			124,204
Transaction expenses	—			—			—			—			—			—
Impairment of goodwill	—			—			—			—			—			—
Total operating expense	(12		)	225			503,927			(26,532		)	—			477,608
Income (loss) from operations	12			(225		)	99,570			47,589			—			146,946
Total other expense (income)—net	—			148,411			506			(526		)	—			148,391
Income (loss) before income taxes and equity earnings of unconsolidated entities	12			(148,636		)	99,064			48,115			—			(1,445		)
Income tax (benefit) expense	—			(35,381		)	25,253			3,882			—			(6,246		)
Income (loss) before equity earnings of unconsolidated entities	12			(113,255		)	73,811			44,233			—			4,801
Net (income) loss attributable to non-controlling interest	(4,522		)	(117,778		)	(43,967		)	16			166,518			267
Net income (loss)	$	4,534		$	4,523		$	117,778		$	44,217		$	(166,518	)	$	4,534
Net income (loss) attributable to non-controlling interest	—			—			—			—			—			—
Net income (loss) attributable to Endurance International Group Holdings, Inc.	$	4,534		$	4,523		$	117,778		$	44,217		$	(166,518	)	$	4,534
Comprehensive income (loss):
Foreign currency translation adjustments	—			—			—			(2,233		)	—			(2,233		)
Unrealized loss on cash flow hedge				(437		)	—			—			—			(437		)
Total comprehensive income (loss)	$	4,534		$	4,086		$	117,778		$	41,984		$	(166,518	)	$	1,864

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

Year Ended December 31, 2019

(in thousands)

	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	—		$	1,064,510		$	61,650		$	(12,882	)	$	1,113,278
Cost of revenue	—			—			482,246			40,932			(12,882		)	510,296
Gross profit	—			—			582,264			20,718			—			602,982
Operating expense:
Sales and marketing	—			—			245,817			12,202			—			258,019
Engineering and development	—			—			96,778			9,599			—			106,377
General and administrative	1,628			238			113,983			2,118			—			117,967
Gain on sale of business	—			—			(40,700		)	—			—			(40,700		)
Transaction expenses	—			—			—			—			—			—
Impairment of goodwill							12,333									12,333
Total operating expense	1,628			238			428,211			23,919			—			453,996
(Loss) income from operations	(1,628		)	(238		)	154,053			(3,201		)	—			148,986
Total other expense (income)—net	—			144,034			(18		)	(562		)	—			143,454
(Loss) income before income taxes and equity earnings of unconsolidated entities	(1,628		)	(144,272		)	154,071			(2,639		)	—			5,532
Income tax (benefit) expense	—			(34,336		)	49,105			3,110			—			17,879
(Loss) income before equity earnings of unconsolidated entities	(1,628		)	(109,936		)	104,966			(5,749		)	—			(12,347		)
Equity loss (income) of unconsolidated entities, net of tax	10,719			(99,216		)	5,750			—			82,747			—
Net (loss) income	$	(12,347	)	$	(10,720	)	$	99,216		$	(5,749	)	$	(82,747	)	$	(12,347	)
Net loss attributable to non-controlling interest	—			—			—			—			—			—
Net (loss) income attributable to Endurance International Group Holdings, Inc.	$	(12,347	)	$	(10,720	)	$	99,216		$	(5,749	)	$	(82,747	)	$	(12,347	)
Comprehensive (loss) income:
Foreign currency translation adjustments	—			—			—			(598		)	—			(598		)
Unrealized loss on cash flow hedge				(279		)	—			—			—			(279		)
Total comprehensive (loss) income	$	(12,347	)	$	(10,999	)	$	99,216		$	(6,347	)	$	(82,747	)	$	(13,224	)

Condensed Consolidating Statements of Cash Flows

Year Ended December 31, 2017

(in thousands)

	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	12		$	(82,189	)	$	281,416		$	2,034		$	—	$	201,273
Cash flows from investing activities:
Businesses acquired in purchase transaction, net of cash acquired	—			—			—			—			—		—
Purchases of property and equipment	—			—			(38,731		)	(4,331		)	—		(43,062		)
Cash paid for minority investments	—			—			—			—			—		—
Proceeds from sale of property and equipment	—			—			—			—			—		—
Proceeds from note receivable	—			—			—			—			—		—
Proceeds from sale of assets	—			—			530			—			—		530
Purchases of intangible assets	—			—			(1,933		)	(33		)	—		(1,966		)
Net cash used in investing activities	—			—			(40,134		)	(4,364		)	—		(44,498		)
Cash flows from financing activities:
Proceeds from issuance of term loan and notes, net of original issue discounts	—			1,693,007			—			—			—		1,693,007
Repayments of term loans	—			(1,797,634		)	—			—			—		(1,797,634		)
Payment of financing costs	—			(6,304		)	—			—			—		(6,304		)
Payment of deferred consideration	—			—			(4,550		)	(883		)	—		(5,433		)
Payment of redeemable non-controlling interest liability	—			—			(25,000		)	—			—		(25,000		)
Principal payments on financed equipment	—			—			(7,390		)	—			—		(7,390		)
Proceeds from exercise of stock options	2,049			—			—			—			—		2,049
Capital investments from minority partner	—			—			—			—			—		—
Intercompany loans and investments	(1,972		)	193,119			(188,367		)	(2,780		)	—		—
Net cash provided by (used in) financing activities	77			82,188			(225,307		)	(3,663		)	—		(146,705		)
Net effect of exchange rate on cash and cash equivalents and restricted cash	—			—			—			2,150			—		2,150
Net increase (decrease) in cash and cash equivalents and restricted cash	89			(1		)	15,975			(3,843		)	—		12,220
Cash and cash equivalents and restricted cash:
Beginning of period	3			4			41,654			15,237			—		56,898
End of period	$	92		$	3		$	57,629		$	11,394		$	—	$	69,118

Condensed Consolidating Statements of Cash Flows

Year Ended December 31, 2018

(in thousands)

	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash (used in) provided by operating activities	$	—		$	(103,123	)	$	246,188		$	39,487		$	—	$	182,552
Cash flows from investing activities:
Businesses acquired in purchase transaction, net of cash acquired	—			—			—			—			—		—
Purchases of property and equipment	—			—			(45,694		)	(186		)	—		(45,880		)
Cash paid for minority investments	—			—			—			—			—		—
Proceeds from sale of property and equipment	—			—			—			—			—		—
Proceeds from note receivable	—			—			—			—			—		—
Proceeds from sale of assets	—			—			6			—			—		6
Purchases of intangible assets	—			—			(8		)	—			—		(8		)
Net cash used in investing activities	—			—			(45,696		)	(186		)	—		(45,882		)
Cash flows from financing activities:
Proceeds from issuance of term loan and notes, net of original issue discounts	—			1,580,305			—			—			—		1,580,305
Repayments of term loans	—			(1,681,094		)	—			—			—		(1,681,094		)
Payment of financing costs	—			(1,580		)	—			—			—		(1,580		)
Payment of deferred consideration	—			—			(4,500		)	—			—		(4,500		)
Principal payments on financed equipment	—			—			(7,439		)	—			—		(7,439		)
Proceeds from exercise of stock options	887			—			—			—			—		887
Intercompany loans and investments	(958		)	205,491			(181,755		)	(22,778		)	—		—
Net cash (used in) provided by financing activities	(71		)	103,122			(193,694		)	(22,778		)	—		(113,421		)
Net effect of exchange rate on cash and cash equivalents and restricted cash	—			—			—			(1,791		)	—		(1,791		)
Net (decrease) increase in cash and cash equivalents and restricted cash	(71		)	(1		)	6,798			14,732			—		21,458
Cash and cash equivalents and restricted cash:
Beginning of period	92			3			57,629			11,394			—		69,118
End of period	$	21		$	2		$	64,427		$	26,126		$	—	$	90,576

Condensed Consolidating Statements of Cash Flows

Year Ended December 31, 2019

(in thousands)

	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash (used in) provided by operating activities	$	(1,609	)	$	(97,558	)	$	261,442		$	(302	)	$	—	$	161,973
Cash flows from investing activities:
Businesses acquired in purchase transaction, net of cash acquired	—			—			(8,875		)	—			—		(8,875		)
Purchases of property and equipment	—			—			(39,126		)	—			—		(39,126		)
Cash paid for minority investments	—			—			—			—			—		—
Proceeds from sale of property and equipment	—			—			—			—			—		—
Proceeds from note receivable	—			—			—			—			—		—
Proceeds from sale of assets	—			—			51,000			1			—		51,001
Purchases of intangible assets	—			—			—			—			—		—
Net cash provided by investing activities	—			—			2,999			1			—		3,000
Cash flows from financing activities:
Proceeds from issuance of term loan and notes, net of original issue discounts	—			—			—			—			—		—
Repayments of term loans	—			(130,980		)	—			—			—		(130,980		)
Payment of financing costs	—			—			—			—			—		—
Payment of deferred consideration	—			—			(2,500		)	—			—		(2,500		)
Principal payments on financed equipment	—			—			(8,189		)	—			—		(8,189		)
Proceeds from exercise of stock options	31			—			—			—			—		31
Intercompany loans and investments	1,752			228,537			(235,805		)	5,516			—		—
Net cash provided by (used in) financing activities	1,783			97,557			(246,494		)	5,516			—		(141,638		)
Net effect of exchange rate on cash and cash equivalents and restricted cash	—			—			—			(914		)	—		(914		)
Net increase (decrease) in cash and cash equivalents and restricted cash	174			(1		)	17,947			4,301			—		22,421
Cash and cash equivalents and restricted cash:
Beginning of period	21			2			64,427			26,126			—		90,576
End of period	$	195		$	1		$	82,374		$	30,427		$	—	$	112,997